Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

LONDON REGIONAL TRANSPORT (No. 2) BILL

HARWICH HARBOUR BILL [Lords]

NEWCASTLE UPON TYNE TOWN MOOR BILL [Lords]

Orders read for consideration of motions.

To be considered on Thursday at Seven o'clock.

Oral Answers to Questions — ENERGY

British Coal

Mr. Gow: To ask the Secretary of State for Energy what progress he has made with his plans to denationalise British Coal; and if he will make a statement.

Mr. Rost: To ask the Secretary of State for Energy when he plans to allow more private sector involvement in United Kingdom coal production.

The Secretary of State for Energy (Mr. Cecil Parkinson): We intend to privatise the coal industry after the next general election. We are currently considering the options; no decisions have yet been made.

Mr. Gow: Is my right hon. Friend aware of the very strong support for his proposals, not only among Conservative Members, but among those who work in the mining industry, and notably among a growing number of members of the National Union of Mineworkers? Will he confirm that the Bill to privatise the British coal industry will be introduced in the first Session of the new Parliament?

Mr. Parkinson: I can tell my hon. Friend that we shall come forward with a Bill as soon as possible in the new Parliament. Whether that will be in the first Session depends on a number of factors, but it will be very early in the new Parliament and the industry will be privatised in the first half of the new Parliament.

Mr. Rost: If privatisation has to wait until after the next election, can we at least have confirmation of assurances that there will be some liberalisation of the rather tight coal monopoly in the immediate future by amending the nationalisation Act to allow the private sector at least to become involved in competition with the nationalised industry as a first step to full privatisation?

Mr. Parkinson: I know that a number of people have been promoting that idea. I should prefer to tackle the problems of the industry as a whole and to come forward with proposals in the next Parliament for the ultimate liberalisation, which is the privatisation of the whole industry.

Mr. Hardy: Will the Secretary of State comment on recent reports that there is keen interest in a management board buy-out of British Coal? Even if he were to confirm that interest, would he maintain the position that he has just stated, which is that there will be no privatisation before the next election and no attempts to prepare the way so that, if the country is unfortunate enough to have a Conservative Administration after the next election, the work will not have been largely done?

Mr. Parkinson: I can give the hon. Gentleman the assurance that he seeks. There will be no attempt at partial or back-door privatisation in this Parliament. The issue will be placed firmly before the British people and we look forward to the Leader of the Opposition, accompanied by Mr. Scargill, touring the country opposing the proposal at the next election.

Mr. Lofthouse: Is the Secretary of State aware that his hon. Friend the Member for Eastbourne (Mr. Gow) is completely out of touch with the views of miners if he thinks that they support privatisation? Is he aware that miners in this country are familiar with the accident rate in the private sector of American mines, which gives a ratio of four to one compared with British mines, and that, in view of the previous safety record of privatised British mines, they fear a return to privatisation which will see a deterioration in the safety record of the mines compared with that of British Coal? Will he give us an assurance that that will not happen?

Mr. Parkinson: I can tell the hon. Gentleman that there will be no lessening of the regulations governing mine safety. I hope that he draws the pleasure that I do from noting that, in recent years, the increase in productivity has been accompanied by a fall in the number of accidents, giving the lie to the argument that one can achieve improved performance only by putting people's lives at risk.

Mr. McLoughlin: Will my right hon. Friend bear in mind that, despite the scare stories often put about by the leader of the National Union of Mineworkers that productivity has a trade off with safety, nationalisation does not mean safer mines, and has nothing to do with safer mines, and there is no need for any fears about the safety of the British coalmining industry, whether in the nationalised or the private sector?

Mr. Parkinson: Let me repeat what I said to the hon. Member for Pontefract and Castleford (Mr. Lofthouse). There will be no lessening of the regulations governing safety, regardless of ownership. The coal industry has been giving the lie to one of the favourite truisms pushed about by the Labour party, which is that we can improve performance only by risking lives. We have been achieving better performance and fewer injuries, and that is the proof that the Labour party is wrong.

Mr. McCartney: Will the Secretary of State confirm that the Opencast Executive will not be privatised as a single unit before denationalisation of the whole industry?

Does he intend to wait until that time and then have it denationalised either as a single unit or part of a regional denationalisation?

Mr. Parkinson: I have already told the House that we have no detailed plans. We have looked carefully at a range of options and shall be working out those options still further. The management buy-out mentioned by the hon. Member for Wentworth (Mr. Hardy) is one of the very interesting possibilities. That is not ruled out, but we are looking at the whole range of options.

Central Electricity Generating Board

Mr. Franks: To ask the Secretary of State for Energy when he next expects to meet the chairman of the Central Electricity Generating Board; and what matters he expects to discuss.

Mr. Parkinson: I regularly meet the chairman of the Central Electricity Generating Board to discuss a variety of issues.

Mr. Franks: Will my right hon. Friend note the case of the Roosecote power station at Barrow-in-Furness, which was decommissioned by the CEGB in November 1986 and for which private sector tenders were invited in February with an April deadline for decision by September? Will my right hon. Friend inquire which September the chairman had in mind and whether it is to be before or after privatisation of the industry? Will my right hon. Friend also inform the chairman that failure to maintain a station, as well as being neglect of a public asset, is a highly effective means of frustrating private sector competition?

Mr. Parkinson: I am pleased to be able to tell my hon. Friend that the tenders have been reviewed, the group which is to take the station has been identified and final negotiations about terms of the contract are now under way.

Ms. Quin: When the right hon. Gentleman next meets the chairman of the CEGB, will he discuss the need to avoid over-reliance on coal imports, especially in view of the worsening balance of payments?

Mr. Parkinson: Yes. I believe that British Coal has a very good opportunity to secure the overwhelming proportion of our coal market. That is why the Government have provided more than £9 billion for the industry since we took office and why more than £6 billion has been invested in modernisation so that our industry can produce competitive coal and hold its own in the market place.

Mr. Hannam: In view of the concern about acid rain and pollution from coal-fired power stations, will my right hon. Friend discuss the matter with the chairman of the CEGB, particularly with regard to measures being carried out for the control of emissions? Can he give us any idea of the level of carbon dioxide emission from coal-fired power stations and how much expenditure on control is planned for the next few years?

Mr. Parkinson: In 1985, the last year for which records are available, 235 million tonnes of carbon dioxide were emitted into the atmosphere from our fossil fuel stations. We believe that a substantial programme is needed to


clean up emissions. That is why the CEGB has already embarked on a very substantial programme, and more will follow.

Mr. Blair: No doubt the Secretary of State will be discussing electricity privatisation with the chairman of the CEGB. Is he aware of reports suggesting that the Government plan a special tax after privatisation to make nuclear energy attractive to private investors? Will he deny unequivocally that any such plans exist? If not, will he explain why the demands of privatisation rank above the interests of the 22 million captive consumers of electricity?

Mr. Parkinson: I begin by congratulating the hon. Gentleman on his election to the shadow Cabinet and expressing the traditional hope that he will spend many happy years on the Opposition Front Bench.
We have a declared policy that 15 to 20 per cent. of our electricity will be supplied from nuclear sources because we believe that diversity of supply is essential to security. There will, therefore, be a nuclear component. The question of nuclear economics is extremely hard to settle. We are talking about building power stations which will still be operating 45 years from now. No one expects fossil fuels to maintain their present prices for more than a few years, so in the next few years what the hon. Gentleman regards as a nuclear burden could well become a nuclear contribution. The Government are determined to ensure that we have a sufficient nuclear component in our electricity supplies.

Dr. Michael Clark: During my right hon. Friend's meeting with the chairman of the CEGB, did he discuss the future closure of Dounreay? Were any plans put forward for job creation schemes in that part of Scotland, bearing in mind that many people will be made redundant? Did he also discuss the continuation of the high-technology research for which Dounreay is famous?

Mr. Parkinson: As my hon. Friend knows, I announced the Government's policy on the fast reactor a few months ago. We have recognised our obligation to Caithness and Sutherland by ensuring that Dounreay will be phased out over a long period. Indeed, there will still be substantial employment at Dounreay for the next eight or nine years and, after that, continuing employment for about one quarter of the labour force.
It is clear that there will be no need for such technology in 30 to 40 years' time. Indeed, there is no way that Dounreay could be kept open for the whole of that time, because the nuclear reactor itself has, at the outside, a life of only about 10 years. We are maintaining our commitment to Dounreay and maintaining a substantial position in fast reactor technology. After Dounreay closes there will be a core research programme to ensure that we maintain our position in that technology.

British Coal

Mr. Janner: To ask the Secretary of State for Energy when he last met the chairman of British Coal; and what matters were discussed.

The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer): My right hon. Friend and I meet the chairman of British Coal regularly to discuss all aspects of the coal industry.

Mr. Janner: Has the Minister discussed with British Coal the delay in the announcement of any further opening of pits in the Vale of Belvoir in Leicestershire, other than the Asfordby pit? As the Secretary of State said earlier that British Coal has a good opportunity to secure a major proportion of our coal market, what are the Government's plans for making use of the cheap and excellent coal available in the Vale of Belvoir? How will they ensure that the skilled and devoted miners will not continue to be slowly put out of work?

Mr. Spicer: The hon. and learned Gentleman will have been pleased to note the agreement on six-day working between the UDM and British Coal at the Asfordby pit, which was one of the major sticking points in its development. Work is now proceeding at some rate. As for other pits in the area, Hawkhurst Moor is not far away, and I understand that a planning inquiry for that pit is due in January 1989.

Mr. Ashby: Did my hon. Friend discuss with the chairman the early introduction of a Bill on mining subsidence? If he did not, did he discuss the introduction by British Coal of a method of practice in line with the White Paper on mining subsidence? Is British Coal anticipating a Bill and doing now what it will have to do later?

Mr. Spicer: We have discussed both those questions with the chairman and his officials. There are a number of ways in which British Coal can improve its present practices on subsidence. The Waddilove report has been published and at an early opportunity we shall introduce legislation to comply with its recommendations.

Mr. Redmond: When do the Minister and the Secretary of State intend to get off their backsides and stop behaving like Pontius Pilate? When will they ensure that retired miners who produced coal for this country throughout two world wars have sufficient fuel for themselves? Will he talk to the chairman of British Coal and ensure that those lads and lasses have the fuel that they require to keep warm during the coming winter?

Mr. Spicer: This matter has been discussed. In fact, the hon. Gentleman took part in an Adjournment debate on it. There are restrictions on how far back such concessions can go. They are a matter for British Coal. I shall certainly pass on the hon. Gentleman's remarks, but the situation is as it stands, and as he knows it.

Renewable Energy Supplies

Mr. Chapman: To ask the Secretary of State for Energy what is his latest estimate of the percentage of United Kingdom energy supplies met by renewable sources; and if he will make a statement about the potential for raising this figure.

Mr. Michael Spicer: Our research and development programme indicates that fuel from waste and energy from wind and tidal sources are the most promising renewable technologies for the future. Each could provide up to 3 per cent. of our total energy requirements by the year 2025.

Mr. Chapman: As my hon. Friend's reply seems to show that the potential for renewable sources to meet part of Britain's energy needs is greater than was thought a few years ago, does he agree that it is essential to continue


Government funding for research? Will he confirm that, under this Government, such funds for research have more than quadrupled?

Mr. Spicer: I confirm that there has been a substantial increase in research into renewable energies, as my hon. Friend has said. I confirm also that it is planned to rise in the near future. My hon. Friend is absolutely right. The Government believe that those varied energy sources are of enormous importance, and the Government are putting a tremendous amount of effort into research into them.

Mrs. Margaret Ewing: In the light of the Secretary of State's claim that he is concerned about workers in the Dounreay area and their future employment prospects, has the Department looked seriously at the possibility of Dounreay being turned into a wind and wave research centre? It would undoubtedly provide employment opportunities for the people who live there. Dounreay is ideally situated because of prevailing weather conditions.

Mr. Spicer: Parts of Scotland are attractive from the point of view of wind power, and the Orkneys are an example. That is why wind power development has taken place in that part of the country. Further plans and developments may be possible, but developments are a matter for power generating companies. We have every reason to believe that more and more private power companies will come forward with projects based upon renewable sources, and they may take place in Scotland.

Nuclear Energy

Mr. Ian Bruce: To ask the Secretary of State for Energy what his Department is doing to reduce harm to the environment by promoting the increased use of nuclear energy in relation to fossil fuels.

Mr. Parkinson: The Governments's commitment to continued diversity of fuel supply, including a suitable nuclear component, will help reduce potentially harmful emissions from fossil-fuelled power stations.

Mr. Bruce: I thank my right hon. Friend for that answer. Surely we are far behind the rest of the world, particularly France, which has a nuclear component of over 70 per cent., and America and Japan have much higher nuclear components than Britain. Those nations are doing far more than we are to cut down emissions from fossil fuels. Should we not do far more to encourage all future power stations to be nuclear power stations?

Mr. Parkinson: Unlike the French and the Japanese, we have substantial reserves of coal, and it would be a mistake for the nation to turn its back on them. We have coal, oil, gas, and nuclear, too. It is right to maintain our nuclear component at its present level. Many of my hon. Friend's constituents work in the nuclear industry. I am sure that he will not fail to point out to them that no other party in the House supports nuclear power.

Ms. Armstrong: Will the Minister acknowledge that the equation is not quite as simple as that which was put to the House by the hon. Member for Dorset, South (Mr. Bruce)? The Government have not yet begun to come to terms with the problem of the disposal of nuclear waste,

but, at the same time, we have the technology and the knowledge to control emissions from coal-fired power stations so that they are not an environmental hazard.

Mr. Parkinson: It is not true that the technology for dealing with nuclear waste has not been identified. The reprocessing of spent fuel is now firmly in hand, and the search for a final disposal site is also nearing completion.
No source of energy does not involve clear-up costs. It is estimated that the cost of clearing platforms from the North sea is about £6 billion, about half as much again as the cost of decommissioning Magnox power stations. Every year we dig out 60 million tonnes of dirt to get 90 million tonnes of coal, and we dump the 60 million tonnes of dirt on the surface of Britain. We have subsidence, and 235 million tonnes of carbon dioxide is emitted from power stations. It is mistaken for the hon. Lady to pretend that all other sources of fuel are clean and easy and that coal is absolutely costless.

Dame Elaine Kellett-Bowman: When promoting nuclear energy, will my right hon. Friend—who knows my part of the world so well—call to the attention of the Central Electricity Generating Board that, in all proposals to store spent nuclear fuel, safety and not the capital programme or the cash flow of the CEGB should be paramount?

Mr. Parkinson: The answer is yes. I know that my hon. Friend is concerned about the proposals for a dry store at Heysham, and I can tell her that safety will be a prime consideration there.

Mr. Matthew Taylor: Is the Secretary of State aware of the Rocky Mountain Institute report, which says that even a sixfold increase in nuclear power would not have a significant impact on the greenhouse effect? In view of his comment that all forms of energy generation have a cost associated with the environment, why has the right hon. Gentleman continued to cut the budget of the energy efficiency office?

Mr. Parkinson: I am aware of the report, although I have only read about it and have not seen it. I believe that it addresses the wrong question. It asks whether nuclear power or energy efficiency can contribute most to the removal of the greenhouse effect. I believe that the greenhouse effect will be alleviated by a combination of factors nuclear power, more emphasis on the control of emissions from coal-fired power stations and energy efficiency. The Government are promoting the lot.

Mr. John Garrett: Will the Secretary of State elaborate on his reported speech to the Mid-Norfolk Conservative Association a couple of weeks ago—the newspaper report is headed "Cecil's Energy Jigsaw"—in which he is quoted as saying that electricity production will be less nuclear dominated after privatisation because of his opposition to gigantic nuclear stations?
As for environmental damage, will the right hon. Gentleman confirm that his Department has commissioned absolutely no research into the effects of energy production and policy on air pollution? If that is so, he is hardly entitled to give such glib answers.

Mr. Parkinson: I do not hold myself answerable to the Mid-Norfolk News, or whatever it is. I formed the


impression from talking to the young man who was there that it was almost the first time that he had ever heard of nuclear power, and he found great difficulty in spelling it.
As for the environment, my Department seeks to promote a range of diverse sources of energy. We have access to a substantial number of studies. We know, and the hon. Gentleman does not deny, the huge costs involved in clearing up in the coal and electricity industries, in clearing the platforms in the North sea, and in further dealing with the problems of subsidence.

Tranco

Mr. French: To ask the Secretary of State for Energy what progress has been made on the appointment of board members and the formation of the management team for Tranco.

Mr. Parkinson: I announced the chairman and chief executive designate appointments to the new national grid company which will control the national grid after privatisation on 9 June. Further designate appointments to the board were announced on 8 October. A copy of the press notice announcing these, and designate appointments to the boards of "Big and Little G", is being placed in the Library of the House. Good progress is being made in allocating senior management and staff between the successor companies.

Mr. French: Will my right hon. Friend explain what role he envisages for the board of Tranco and the two generating companies in the period prior to full privatisation?

Mr. Parkinson: The designate boards will be making arrangements to take over the running of the companies after vesting day on 1 January 1990. There are a great many interim preparations to be made and they are being made now; for example, the sub-division of the assets and arrangements to continue research programmes. Work is going on to ensure that there is an easy transition on vesting day.

Coal Imports

Mr. Cran: To ask the Secretary of State for Energy if he will take steps to ensure that no import quotas are imposed on foreign coal following the privatisation of the domestic coal industry.

Mr. Michael Spicer: The Government place no restrictions on imports of coal and have no intention of introducing any. As British Coal continues to improve its efficiency we believe that it will remain the supplier of choice for most purchases.

Mr. Cran: Is my hon. Friend aware that more than 300 jobs in my constituency will be lost by an intensive energy user called Capper Pass? It attributes many reasons to that, including the fact that electricity prices are too high. Does my hon. Friend agree that that should not recur with the privatisation of coal and electricity because of the downward effect on prices which those events will have?

Mr. Spicer: I certainly agree that under a privatised electricity industry the pressure on costs through competition will make prices lower than under a nationalised industry. It has always been the Government's position that a privatised electricity

industry could buy its coal in the best market. As I have said, we are confident that with the continued efficiency improvements in British Coal it will be the supplier of first choice.

Mr. Barron: If coal imports increase and threaten indigenous production, will the Government take action to ensure that our national interests are always looked after?

Mr. Spicer: What are the national interests? The hon. Gentleman will surely know that a reason why there has been a marginal increase in coal imports—to nearly 10 per cent.—is that under this Government we have had a successful steel industry which has been importing large amounts of coking coal, which this country cannot supply. Therefore, let us consider exactly what is the national interest.

Mr. Oppenheim: Is it not about time that British Coal lost its virtual monopoly of coal reserves? Surely it is not healthy for a big centralised organisation to have a monopoly, as British Coal does, especially when it comes to the opencast sector, where British Coal insists on operating only large, environmentally damaging, opencast sites rather than smaller, more environmentally sensitive ones?

Mr. Spicer: As my right hon. Friend said, the whole question of licensing rights and the ownership of reserves is a central matter to be addressed when we come to privatise the industry.

Energy Conservation

Mr. Vaz: To ask the. Secretary of State for Energy what conclusions he has drawn from the energy conservation schemes in Leicester; and if he will make a statement.

The Minister of State, Department of Energy (Mr. Peter Morrison): I understand that the Leicester local energy action campaign has achieved a number of successes. My right hon. Friend looks forward to receiving the final report on the campaign, which I understand is due to be issued by the end of the year.

Mr. Vaz: Will the Minister join me in congratulating Leicester city council and the energy consortium there on the success of the scheme? Will he assure the House that his plans for privatisation will not in any way affect the success of the scheme? In particular, will he confirm that area boards will be entitled to have the freedom to conclude contracts with the consortia, irrespective of the privatisation plans?

Mr. Morrison: I am delighted to agree with the hon. Gentleman about the local initiative in Leicester and to say that such initiatives have also been taken in other cities. On the second part of his question, I can confirm that that will be the case.

Departmental Offices

Mr. Tim Smith: To ask the Secretary of State for Energy what will be the total annual cost of his Department's new offices.

Mr. Peter Morrison: The total annual cost to be charged to my Department by the Property Services Agency under the property repayment service is currently


estimated at £9·45 million, although the rent paid by the PSA, and hence the actual annual cost to the taxpayer, will be substantially less.

Mr. Smith: Has the Department of Energy not been so successful with its policies, first by privatising gas, now by privatising electricity and soon by privatising coal, that it has effectively done itself out of a job? In those circumstances, would it not be better advised, rather than hiring expensive new offices, to set a time when no offices will be needed?

Mr. Morrison: I am delighted to accept my hon. Friend's congratulations on the Department's success. We still have to get through the Bill to privatise electricity and, as my right hon. Friend the Secretary of State explained, coal is for the next Parliament, too. We shall need the odd office from which to organise that. In case my hon. Friend has not seen the figures, may I tell him that in 1986 we had 300,000 sq feet. Today we have 245,000 sq feet, and when we move to our new premises next year the figure will be reduced to 184,000 sq feet. It will have been nearly halved in four years.

Mr. Win Griffiths: What measures will be taken in the new offices to conserve energy? Does the Minister agree that if the Government spent more money on conserving energy instead of on promoting power stations such as Hinkley C we would need no more new power stations for a decade?

Mr. Morrison: I assure the hon. Gentleman that we have taken measures to improve the conservation and use of lighting and heating. Initiatives in that direction have been taken across Whitehall.

Coal Production

Mr. Lawrence: To ask the Secretary of State for Energy how many kilojoules per man hour were produced by British Coal in (a) 1979 and (b) the last 12 months for which figures are available; and if he will express the latter as a percentage of the former.

Mr. Michael Spicer: Productivity rose from 2·24 tonnes per manshift in 1978–79 to 3·62 tonnes in 1987–88, an increase of 62 per cent. Productivity figures based on heat content are not available.

Mr. Lawrence: The House will wish to congratulate the miners and British Coal on achieving those remarkable productivity figures under a Conservative Government. Can my hon. Friend give comparable figures for productivity when the Labour party had control of the coal industry?

Mr. Spicer: I could give the House those figures, but it would be rather boring if I did. During the Labour Government productivity in the coal industry fell every year that they were in office.

Mr. Flynn: What does the Minister believe will be the effect on coal consumption of today's news of the collapse of the first serious bid to generate electricity privately under the Energy Act 1983? Will he investigate why his Department encouraged the doomed plan to reopen Rogerstone power station by backing Mr. Angelo Casfikis when there was abundant evidence then, as now, that he is a man of straw? Will the Department promise not to

support dotty schemes to reopen clapped-out power stations in the face of the united opposition of local people and councils?

Mr. Spicer: The Government's policy is to encourage as much competition in the generation of electricity as possible, and the thrust of the proposals that we shall place before Parliament during the next few months will be precisely to that effect. The Government have no control over who makes applications; nor do we wish to have any. But we do wish to encourage all-corners to apply on their merits for rights to produce electricity.

Electricity Industry

Mr. Brandon-Bravo: To ask the Secretary of State for Energy how many proposed private schemes he is aware of in connection with the proposed privatisation of the electricity supply industry; and what percentage of the present electricity output these represent.

Mr. Parkinson: I am aware of some 15 private generation proposals. If all came to fruition, they would amount to 8 per cent. of the total electricity needs of England and Wales.

Mr. Brandon-Bravo: As the White Paper was published barely six months ago, is my right hon. Friend encouraged by such interest at this early stage? Does that not represent a serious input of competition? More important, will he give the House every assurance that the new private generation schemes will have easy access to the national grid?

Mr. Parkinson: Yes. Private generators will have access as of right to the grid, although they will have to pay a fee to use the service. I hear some sniggering remarks from the Opposition, but may I tell them that those 15 proposals come from some of the finest companies in Britain and in the world.

Mr. Alan W. Williams: How many of those proposals involve the use of gas to generate electricity? I notice that the Fawley B application has been withdrawn, and there is increasing talk of gas being used to generate electricity in many small schemes after privatisation. Does the Minister agree that that would be an absurd use of gas? Using gas to generate electricity is less than 50 per cent. efficient, whereas using it for heating in homes and industry is almost 100 per cent. efficient. Does the Minister agree that it is absurd in relation to the greenhouse effect?

Mr. Parkinson: Three or four of those applications involve the use of gas. Gas-fired stations can be produced quickly—within two years—they are extremely flexible and many people believe that the shortage of those facilities has been a disadvantage to the electricity supply industry in the past. That will be remedied.

Mr. Thurnham: To ask the Secretary of State for Energy what recent representations he has received about his plans for privatisation of the electricity supply industry.

Mr. Michael Spicer: I continue to receive representations on electricity privatisation. It is clear from my discussions with many interest groups that there is a large body of support for our proposals.

Mr. Thurnham: Does my hon. Friend agree that after privatisation decision-making should be better than it has sometimes been? Was it not the last Labour Government who ordered the Drax power station without gas scrubbers because they could not face telling Arthur Scargill the true cost of burning coal?

Mr. Spicer: My hon. Friend makes an excellent point. There is no question but that this Government have led the field in insisting that the electricity supply industry starts to clean up emissions. There are now plans for £1·5 billion worth of pollution control plant that would not have been conceived of by the Labour Government.

Oral Answers to Questions — THE ARTS

Leicester

Mr. Janner: To ask the Minister for the Arts when he next proposes to visit the city of Leicester to discuss the effects of Government arts policy there.

The Minister for the Arts (Mr. Richard Luce): I have no immediate plans to visit Leicester, which I last visited on 8 September this year.

Mr. Janner: Is the Minister aware that Leicester city council applied for additional funding for five workers for its arts action project in accordance with the Minister's own pronouncements that arts are important for inner city regeneration? Is he aware that the Secretary of State for the Environment saw fit to turn down that application and would not allow one additional person? He said that he did not consider the funding of arts promotion activities to be a priority for regeneration resources. Is the Secretary of State trying to sabotage the Arts Minister's efforts to help?

Mr. Luce: The hon. Gentleman should pursue that point with my right hon. Friend the Secretary of State for the Environment. In the past few weeks there has been a great deal of interest in the role that arts and heritage can play in the regeneration of inner cities. It is because of that that three useful seminars have been held, in Glasgow, Kent and Halifax. All those were based on practical evidence on the ground that arts and heritage play a leading part in the regeneration process, but it must be up to the local authorities and the Government to decide whether certain projects fall within the required criteria.

Endowment Funding

Mr. Butler: To ask the Minister for the Arts if he will make it his policy to move towards selective endowment funding of arts and heritage bodies.

Mr. Luce: I am very much in favour of arts bodies building up endowment funds. Apart from the special case of the National Heritage Memorial Fund, however, such funds should be drawn from private sector resources.

Mr. Butler: Will my hon. Friend reconsider this and, perhaps, experiment with launching out on endowment some of the smaller museums currently funded by his Office?

Mr. Luce: I am grateful to my hon. Friend for his point. There is no doubt that the establishment of endowment funds in the arts helps to strengthen the security and independence of arts bodies. I am very much in favour of

the expansion of those endowment funds. They have tended to happen with the larger bodies. The most recent example is the National Theatre, which has established a £1·5 million endowment fund, under the leadership of the outstanding retiring chairman, Lord Rayne. With the range of tax concessions already available, people should be encouraged to establish endowment funds.

Libraries (Green Paper)

Ms. Walley: To ask the Minister for the Arts how many representations from (a) library authorities and (b) members of the general public he received on the Green Paper on "Libraries".

Mr. Luce: I have received representations from 103 library authorities and about 7,000 from organisations and individuals.

Ms. Walley: I thank the Minister for his reply. Will he tell us how many in each of those two categories are in favour of, or are against, the proposals in the Green Paper? Judging from the response in my constituency, many members of the public, professional organisations and county councils are against proposals to put those services out to private contractors. In the light of that, is the Minister carrying out proper consultation?

Mr. Luce: I do not think that there could have been a more extensive consultation than the one we have had on the Green Paper on Libraries. For that reason I welcome the large number of representations that have been made to me, which we are presently studying. In due course I shall make a statement on them. Varied views have been expressed and I found that, as time went on, there was a greater understanding of what I was trying to achieve—to help the library services to improve themselves still further and to get better value for money. Sub-contracting is worthwhile only if one gets better value for money or an improved service. I believe that that makes absolute sense.

Mr. Robert B. Jones: Is my right hon. Friend aware of how many of the people who sent in representations on the Green Paper had read that paper rather than having a simple interpretation of it given to them by a union or other vested party? Those of my constituents to whom I sent a copy of the Green Paper and who wrote to the Department had different views about it after they had studied the proposals in context.

Mr. Luce: My hon. Friend makes a fair point. It often happens that when a Government publish a Green Paper it is misinterpreted, sometimes deliberately. I believe that that partly happened in this case, and I believe also that a large number of people—not everyone—have misinterpreted it. Those people have done themselves, as well as the library service, a disservice.

Mr. Fisher: Will the Minister answer the point raised by my hon. Friend the Member for Stoke-on-Trent, North (Ms. Walley) and say how many people who submitted answers to the Green Paper rejected the Government's proposals in that document? Is it not the case that the vast majority of people who replied to that Green Paper said no to the premium book scheme, no to privatising branch libraries, no to privatising the loan of education videos and no to privatising the library services to old people's homes?


Does the Minister not understand that such proposals undermine the public service aspect of public libraries and must be rejected?

Mr. Luce: The majority of those who replied were more sensible than that. They did not give a yes or no to the Green Paper, but they saw that it contained a range of sensible suggestions. Those people put forward their constructive ideas about the proposals, some of which they were in favour of and some of which they had doubts about. That is what a Green Paper discussion should be all about.

Joint Stock Theatre Company

Mr. Sedgemore: To ask the Minister for the Arts when he last saw a performance of the Joint Stock Theatre Company.

Mr. Luce: I have not been able to see a performance by the Joint Stock Theatre Company.

Mr. Sedgemore: Oh. Will the Minister confirm that anyone who has not seen a performance by this company is an appalling philistine? Will he also confirm that the switch in Arts Council funding for this company from revenue to project status is based on nothing more than ideological spite and dislike for the radical, cutting edge of the superb performances of this wonderful company, about which nothing bad could ever be said?

Mr. Luce: It is nice to see the hon. Gentleman showing such enthusiasm for Joint Stock Theatre Company, and I welcome that. At the end of the day it is for the Arts Council to make a judgment on the grounds of artistic merit as to whether an arts organisation should be supported. As I understand it, the Joint Stock Theatre Company is eligible for project funding, and it is open to it to make an application to the Arts Council.

Mr. Robert G. Hughes: Does my right hon. Friend agree that the Government have a good record, which compares favourably with that of previous Governments, on supporting touring companies? That support is right because those companies bring the arts closer to people.

Mr. Luce: I am grateful to my hon. Friend. It is worth noting that I have earmarked additional sums to the tune of £1·5 million this year for the additional touring activities of major arts bodies. As a result, we have had the evidence of increased touring by theatres, orchestras and opera companies. That is to the benefit of all our people.

Museums and Galleries

Mr. Harry Greenway: To ask the Minister for the Arts what information he has as to the current level of attendance at museums and galleries.

Mr. Luce: The number of visitors to museums and galleries has increased strongly in recent years, rising from 68 million visitors in 1985 to 73 million in 1986. The Museums Association estimates that visitor numbers could top 100 million during Museums Year 1989, when the association will celebrate its centenary.

Mr. Greenway: Will my right hon. Friend convey my congratulations and the congratulations of all hon. Members to those concerned with those figures? The much improved attendances at museums and galleries are

further evidenced by the enormous growth in private, municipal and independent museums and galleries. Is that not a tribute to the improvement in and provision of education that we have had under this Government?

Mr. Luce: I entirely agree with what my hon. Friend has said—the proof of the pudding is in the eating, and the number of people attending those museums all over the country represents a remarkable expansion. We are still seeing the opening of a new museum on average once every fortnight, which is testimony to the public interest in and increasing demand for museums and galleries.

Mr. Buchan: Does not that interest make all the more serious what happens when charges are imposed in our museums? The Minister is ignoring the point that, on average, there has been a drop in attendance of around 40 per cent. in the first year, which sometimes continues, in all the institutions that he has allowed or encouraged to charge. Is that not more reactionary than the position before Victorian philanthropy?

Mr. Luce: It is entirely up to the trustees of bodies to decide whether to make charges and, if so, in what way. When they make charges, one of the most noticeable things is that they have a range of concessions for certain people, whether schools, residents and so on, to enable them to have access to the museum at concessionary prices. It is also interesting that a number of them are ensuring that their museum remains open without charge at certain hours, although there are charges for the rest of the day. That is another concession. Above all else, the biggest test is whether charging leads to improvements of the museum's services which, in turn, benefit the public, and there is plenty of evidence of that.

Oral Answers to Questions — CIVIL SERVICE

Party Conferences (Duties)

Mr. Tony Banks: To ask the Minister for the Civil Service what guidance is given to civil servants with regard to their duties and responsibilities relating to attendance on official business at party conferences.

The Minister of State, Privy Council Office (Mr. Richard Luce): It is an established principle that civil servants should not engage in activities likely to call into question their political impartiality.

Mr. Banks: May I tell the Minister that that is a thoroughly unsatisfactory and complacent reply, given the way in which the Government have blurred the distinction between Civil Service and party political activity, the most blatant example being the party political use of press officers? Will the Minister assure the House either that he will give instructions to Ministers not to use civil servants in the party political way that they do, particularly in respect of attendance at the Conservative party conference, or that he will come to the House and make proposals for a politicised Civil Service, honestly done, on a spoils system, because that is what we are going towards?

Mr. Luce: I do not know what the hon. Gentleman is getting at when he refers to attendance at the Conservative party conference. If he has an allegation to make against a particular Department or Secretary of State, he should make it directly and substantiate such charges. There are


clearly laid down rules and a copy of the establishments officer's guide is available in the Library and can be referred to. It is up to my right hon. Friends to stick to those rules.

Sir Geoffrey Finsberg: Will my right hon. Friend confirm that the instructions and guidelines to civil servants include the fact that they should not steal documents and send them to the Labour party?

Mr. Luce: My hon. Friend makes a point. It is remarkable for the hon. Member for Newham, North-West (Mr. Banks) to suggest that rules are being transgressed, for example, at the Conservative party conference, without substantiating his allegations.

Agencies

Mr. Wilshire: To ask the Minister for the Civil Service what progress has been made in the last four months in the establishment of Government agencies under the Civil Service reforms.

Mr. Tim Smith: To ask the Minister for the Civil Service how many executive agencies have beeen established.

Mr. Luce: Two executive agencies, the Vehicle Inspectorate and Companies House, have been established so far. A further 30 candidates are under consideration.

Mr. Wilshire: I thank my right hon. Friend for his reply. Does he now have more activities to add to the list that he announced on 25 July? What specific arrangements are being made for each agency to ensure that there is strong public accountability and a business management ethos?

Mr. Luce: I am grateful for my hon. Friend's interest. I have undertaken to give a progress report to the House every six months or so on the establishment of agencies. As I said, we now have the two first agencies—the Vehicle Inspectorate and Companies House. I expect the Department of Health and Social Security resettlement units and the employment service to be early candidates for the creation of agencies. Since I last spoke in the House, there are three new candidates—the Land Registry, the Building Research Establishment and the Crown Suppliers' fuel business.
The Select Committee on the Treasury and Civil Service has made its views known to us about accountability. The established traditions of accountability and ministerial responsibility to the House remain, and the methods for achieving that are being looked at as a result of the views of the Committee. The Government will reply to them shortly.

Mr. Smith: On that last point, may I reinforce what the Select Committee on the Treasury and Civil Service said about accountability. Does my right hon. Friend agree that if we give the chief executive of an agency the responsibility of running it, he, not a permanent secretary at the Department, should be the accounting officer? I hope that my right hon. Friend will be able to respond positively to the recommendations made by the Treasury and Civil Service Select Committee.

Mr. Luce: I take careful note of my hon. Friend's comments. As he says, that was one of the points made by the Select Committee and I assure him that we shall take that aspect on board.

Mr. Campbell-Savours: I believe that the Minister's answers today are of some historic importance, and only time will tell why. Will he give an absolute assurance that the creation of the agencies will in no way undermine the accountability of Departments or Ministers to Members of Parliament and to Parliament?

Mr. Luce: I give an absolute assurance to the hon. Gentleman that it will not, in any way. I believe that it will actually strengthen the system of accountability. At the end of the day Ministers are directly accountable to the House.

Mr. Cryer: Is not experience with the establishment of private agencies that Ministers who seek to evade responsibility will always be able to refer questions to that particular agency? That happens now with organisations in the public sector, such as the Central Electricity Generating Board. All the assurances are so much hollow nonsense, because hiving off means that the Table Office will not accept parliamentary questions, the Minister can evade them and there is a severe diminution in public accountability to the House.

Mr. Luce: I disagree. The principle of delegated authority to civil servants to carry on their responsibilities and have some budget control will lead to better management and to decision-making within the Civil Service of an even higher standard than at present. The principle is right. At the same time, the principle of ministerial accountability to the House remains absolutely firm. At the end of the day the Minister in charge, the political head of the Department, will be accountable to the House of Commons.

Secondments

Mr. Butler: To ask the Minister for the Civil Service what targets he has set for secondments into and out of the Civil Service.

Mr. Luce: I no longer set central targets for secondments. That is now a matter for individual Departments, which will be implementing new programmes for interchange with business over the next few years. I hope that their effect will be to enhance significantly the overall number of secondments between the Civil Service and other organisations.

Mr. Butler: Does my right hon. Friend agree that civil servants would benefit from some experience of the problems of small businesses? Will he encourage secondments to small businesses for civil servants?

Mr. Luce: I am grateful to my hon. Friend for his interest in this matter. Without any shadow of a doubt, I can say yes, we shall try to encourage greater secondment to small businesses. I am also trying to encourage secondment from regional and local offices, aimed particularly at smaller businesses. In that way we can help. The recent White Paper, "Releasing Enterprise" gives particular emphasis to that.

Unions (Meetings)

Mr. Winnick: To ask the Minister for the Civil Service when he last met the leaders of Civil Service unions; and what subjects were discussed.

Mr. Luce: I have meetings from time to time with representatives of Civil Service trade unions both centrally and during visits to Civil Service establishments. A wide variety of matters are raised.

Mr. Winnick: Are we to understand that the Prime Minister's statement in Poland about basic human rights means that trade unionists at GCHQ will no longer be victimised because they want to exercise their basic human rights in this country? As the word "hypocrisy" is not allowed here, how else can the Minister explain the difference between what the Prime Minister says in Poland and what the Government do in this country?

Mr. Luce: I am astonished that the hon. Gentleman can seek to draw a parallel between what is happening in Poland today and what is happening in this country. My right hon. Friend the Prime Minister paid a highly successful visit to Poland and the hon. Gentleman should be proud of the fact that my right hon. Friend carries such authority abroad. As for the hon. Gentleman's comparison, does he not understand the difference between Poland and true democracy, with freedom under the law and a freely elected Parliament? If he does not understand that, he does not understand anything.

Mr. Hind: In his discussions with Civil Service trade unions about executive agencies, will my right hon. Friend

consider locating many of these new executive agencies in the provinces in areas of high unemployment? Will he also pursuade the trade unions to agree to that course of action?

Mr. Luce: My right hon. Friend the Paymaster General has answered questions on this subject in the House. The Government are actively setting the right environment in which it is possible for Departments to take decisions about whether to be inside London or in another part of the country. Four out of five civil servants are now outside London, but they need to consider carefully, sensibly and ruthlessly, whether there are advantages in moving to another part of the country.

Dr. Marek: Does the Minister accept that on more than one occasion trade unions in GCHQ offered a no-strike deal to the Government? Will he confirm that the Government did not respond to those offers and decided to ban the right of free association? What explanation can there be for today's action by many thousands of trade unionists other than a firm rebuttal of the Prime Minister's pathological hatred of British trade unionists and her belief that trade unionists throughout the country are the enemy within?

Mr. Luce: It surprises me that the hon. Gentleman has not yet accepted that national security has to come first and that GCHQ needs to operate continuously if it is to be effective. Between 1979 and 1981, 10,000 working days were lost. As a result of that, the effectiveness of GCHQ was jeopardised. That is the heart of the matter.

Pensioners (Benefits)

Mr. Neil Kinnock(by private notice): To ask the Chancellor of the Exchequer if he will make a statement on his intention to introduce further means-tested benefits for pensioners.

The Chancellor of the Exchequer (Mr. Nigel Lawson): Mr. Speaker, I have no such intentions except in one respect. I have been discussing with my right hon. Friend the Secretary of State for Social Security a scheme to give special help to poorer pensioners. This would be over and above the existing level of benefits. We shall announce the outcome of this consideration in due course.

Mr. Kinnock: Will the Chancellor accept that his briefing on Friday and his statement that
only a small minority of pensioners have difficulty in making ends meet
produced widespread concern among pensioners and the general public? Does not the Chancellor recognise that the people in "difficulty", far from being "a small minority" as he claims, are, on the Government's own figures, the 3 million people who are on or below income support level, and the 3 million more who are just above that low level? Will he not accept, once and for all, that pensions are not an act of charity to an older generation; they are a right that retired people have earned in a lifetime of contributions.
Since the Chancellor is such an advocate of targeting, will he now acknowledge that such a policy inevitably brings a more means-tested system and creates a wider poverty trap? Can he also tell us why it is that, when he targets handouts to the better-off, his aim is unerringly accurate, but when he targets benefits to the poor he always misses many of those in genuine need? [HON. MEMBERS: "No!"] It is the Chancellor's fault for talking to the press. [Interruption.]

Mr. Speaker: Order.

Mr. Kinnock: Had the public not been misled on so many occasions over SERPS, child benefit and housing benefit, it might be more possible to believe what the Chancellor has been saying in denying his own words. Will he now specifically confirm that the Government will not, now or at any other time, means-test—[Interruption.] This is vital to 9 million people in this country. Will the Chancellor confirm that the Government will not, now or at any other time, means-test or reduce the national insurance pension? Will he pledge that the Government will not withdraw, reduce, or means-test the right of all old-age pensioners to free prescriptions?
Will he give an undertaking now that the Government will not introduce any new charges? As the mobility and attendance allowances are not covered, although they are vital to 3 million people—[Interruption.]

Mr. Speaker: Order. This is a matter of great interest.

Mr. Kinnock: As the mobility and attendance allowances are not covered by the Government pledge to annual uprating, will the Chancellor now give assurances that he will maintain the value of those and will not subject the right to receive them to any form of means test? If the

Chancellor wants us and the country to believe that all the reports over the weekend are nothing more than what he called
the fevered imagination of the press",
why does he not prove his commitment to pensioners by scrapping the policy of charging 6·5 million pensioners for eye tests, and scrap them now?

Mr. Lawson: Mr. Speaker, that was an extraordinarily long series of supplementary questions—[Interruption]—designed simply to conceal the fact that the right hon. Gentleman has once again demonstrated his infallible knack for getting the wrong end of every stick. The Government—[Interruption.]

Mr. Speaker: Order. The Leader of the Opposition has asked some questions and it is right and fair that the Chancellor should have an opportunity to answer them.

Mr. Lawson: The Government's position on social security benefits remains today exactly as it has always been. It remains today precisely what it is, including the pledge to maintain the retirement pension in real terms. We have uprated the retirement pension consistently in line with inflation, despite the fact that there are 1·25 million more old-age pensioners today, and despite the fact that the Labour Government, which the right hon. Gentleman supported, although he was not a member of it, that the Labour Government cheated the old-age pensioners. They cheated the old-age pensioner twice. On two occasions, they withdrew the Christmas bonus. They changed the uprating system from the historic uprating to the so-called forecast, cheating them of £1 billion. [HON. MEMBERS: "Answer the question!"] Then they fiddled the forecast—that is what they did—[Interruption]

Mr. Speaker: Order. This shouting does not enhance the reputation of this place.

Mr. Lawson: The only change which I have been discussing, and my right hon. Friend the Chief Secretary has been discussing, with my right hon. Friend the Secretary of State for Social Security, is a scheme to improve the benefits received by poorer pensioners. We have done that because pensioners as a whole have seen their real living standard, their real incomes, rise since we took office by over 20 per cent. When the party opposite were in office, they rose by only 3 per cent. That is what has happened, but there are some pensioners who are less well off and we are seeking a way to help them.

Dame Jill Knight: We are most grateful to my right hon. Friend for the statement that he has just made and for clearing up what most of us thought—[Interruption.]

Mr. Speaker: Order.

Dame Jill Knight: —was gross misreporting of the situation at the weekend, thereby making it clear that there is indeed no threat whatsoever to contributory pensions. Will my right hon. Friend note that many of us feel that it is unjust to make non-contributory pensions and handouts to those who can perfectly well afford to do without, bearing in mind that it is the poorer taxpayers who have to foot the bill?

Mr. Lawson: On the second point, my hon. Friend makes an important point, which I think has considerable


support on this side of the House. On the first point, I am afraid that it is true that the standards of the press have slipped somewhat since I—[Laughter.]

Mr. Speaker: Order. I remind hon. Members that we have a very full day ahead of us. I call the Chancellor of the Exchequer.

Mr. Lawson: —since I ceased to be a member of it. However, I am therefore grateful to the right hon. Gentleman the Leader of the Opposition—the first Leader of the Opposition for 34 years to ask a private notice question of a departmental Minister—for giving me the opportunity to make this statement today.

Mr. A. J. Beith: How on earth did the Chancellor, as a former journalist, manage to mislead so many journalists at once about his intentions? Does he not realise that the message that is coming across to a great many people is that, if they save for their retirement or have an occupational pension, however small, they will lose benefits, as they have already lost housing benefit, home insulation grants and other benefits? If that message continues to come across, the savings ratio will become even worse than it is now.

Mr. Lawson: The hon. Member has raised an important point. That is a consideration. I hope that there can be a little bit more quiet from the Benches opposite even though I know they have been badly wrong-footed and badly misled by the Leader of the Opposition, as usual.
The hon. Gentleman makes a good point. One could argue that nothing extra should be done to assist these poorer pensioners at all because that would be a disincentive for them to save. One could take that view. It may be the view of the Liberal party, or whatever it is nowadays called, but it is not the view of the Government.

Sir William Clark: The Leader of the Opposition referred to the right of pensioners to have a pension. Will my right hon. Friend the Chancellor reiterate that under the previous Labour Government, which the right hon. Gentleman supported, pensioners came off very badly indeed, compared with their position since 1979? As the Government are trustees of the taxpayers' money, does my right hon. Friend agree that it is right that that money should go to people in real need, rather than across the board? It is a fallacy to think that all retired pensioners are on the poverty line. Many pensioners can afford to pay the charges and live in very good circumstances.

Mr. Lawson: My hon. Friend is correct. I will repeat what I said earlier on. I am not surprised that, because of the noise and baying from the Benches opposite, it was difficult for my hon. Friend to hear it. When the party opposite were in office—[HON. MEMBERS: "Come off it."] They do not like it, but they have got to listen to it—the real incomes of old-age pensioners rose by only 3 per cent. During the period that we have been in office so far, the real income of the average pensioner has risen by well over 20 per cent.

Mr. Frank Field: May I thank the Chancellor of the Exchequer for the judicious way in which he waved a fig leaf this afternoon, in his statement about the concessions for some old-age pensioners? Does not he agree that the House is being extremely unfair in its

response so far, in that the briefings he gave at the weekend follow logically from the statement that we heard recently on the freezing of child benefit? If it is proper to target help on families in need, is it not also proper for the Government to target help on other groups? Are not the pensions for 7 million pensioners, the payments to half a million widows, the disability pensions drawn by well over 1 million people and the 700,000 payments to the unemployed at stake if the Government really mean to target benefits? I have been a Member of the House since 1979. We in the Labour party have rarely got our teeth near an election winner. We have one today and we do not intend to take them out.

Mr. Lawson: I have considerable respect for the hon. Member, but what I have no respect for is his attempt to terrify millions of old-age pensioners—[Interruption.] It is a disgraceful way to try to seek temporary political advantage—a disgraceful way. Let me say that the only announcement I have to make—the only change I have to inform the House of—is the one that I informed the House of today. This is a matter which I hinted to certain journalists on Friday. They misunderstood what I was saying—[Laughter.] There is no—[Interruption.]

Mr. Speaker: Order. This kind of laughter and these interruptions take up a great deal of time. Many hon. Members want to ask questions about this matter.

Mr. Lawson: —and as a result went in for a farrago of invention but that is no reason for the hon. Member to take it out. What I have to say is this matter is a serious matter. This matter is a serious matter. This matter was discussed by my right hon. Friend the Chief Secretary and my right hon. Friend the Secretary of State for Social Security during this year's public expenditure round but we were not, during that round, in a position to have a worked-out scheme. We were not in this round in a position to put the scheme in place but in due course we shall do so and this is good news for the pensioners and I hope the whole House will welcome it.

Sir Barney Hayhoe: Is my right hon. Friend aware that his statement this afternoon, the assurance within it and the assurances that he gave this morning in his interview on Radio 4, will be widely welcomed? However, can he explain why these assurances were not given at least 24 hours earlier?

Mr. Lawson: I think perhaps I may ask my right hon. Friend why he did not try to ascertain the facts of the matter before he made the statement that he did to the media.

Mrs. Audrey Wise: Will the Chancellor accept our sympathy for his evident inability to make himself understood? Will he accept that his problems would be eased if he in turn realised that what pensioners want are better universal benefits and, if some of those benefits go to those who are rather better off, they will be recouped when those self-same people pay their taxes?

Mr. Lawson: We have maintained the value of the state retirement pension despite the fact that there are a million and a quarter more pensioners—maintained that in real terms as we had pledged we would do and we will continue to do so. That is firm; that is clear. What is also clear is that as a result of SERPS, someone now retiring gets on SERPS an extra £25 a week, whereas in 1979 it was an


extra £1 a week. That is, as I say, an extra £25 a week in SERPS. Many more people now have occupational pensions. Many more pensioners now have savings. Unlike with the Labour Government when inflation robbed them of the value of their savings, they are now getting a real return on their savings. So that is why pensioners as a whole have had their incomes rising faster than that of the rest of the community. But there still remains a problem—[AN HON. MEMBER: "You."]—as all of us on this side of the House know. There still remains a problem of a minority of pensioners who have done far worse. That minority is the minority we propose to address with the new scheme which I told the House about a few moments ago.

Mr. Andrew Bowden: Does my right hon. Friend accept that up to 30 per cent. of pensioners live at an unacceptably low standard of living? Does he also agree that another 30 per cent. of pensioners have a very reasonable standard of living? Surely it is quite illogical to give a £10 Christmas bonus to the top 30 per cent. instead of giving a £20 Christmas bonus to the bottom 30 per cent. Let us use the money wisely.

Mr. Lawson: I know of my hon. Friend's concern over many, many years for the pensioners and he has been consistent in that, but I have to say I have no change to announce whatever in the payment of the Christmas bonus. We will continue to pay it; indeed, we have put it on a statutory basis, unlike the Labour Government who, two years out of five they were in office, failed to pay it at all.

Mr. Michael Foot: As the Chancellor of the Exchequer has somewhat ungallantly attributed all his difficulties to members of the press, will he tell us which were the offending newspapers and whether he intends to invite their representatives to come round and see him again?

Mr. Lawson: The journalists concerned—the journalists concerned know very well if they—and if they look in their notebooks—and they were taking notes—they will see that what—the stories that appeared in the Sunday press hear no relation whatever to what I said.

Mr. Ray Whitney: Does my right hon. Friend agree that the splutterings of the Leader of the Opposition, which were so ill-judged and appeared to be so synthetic, may have been a genuine cry of rage? Does he further agree that all the new and positive thinking on social and other issues come from this Government and from the Conservative party and that there is no new thinking on the part of the Labour party and the other Opposition parties? Last week, the Opposition affected to be outraged by the suggestion that our hon. Friend the Under-Secretary of State responsible for higher education was seeking new funds to ensure that a greater proportion of young people would benefit from higher education. They are now outraged that my right hon. Friend is seeking to find new resources for the lower-income sections of the elderly population.

Mr. Lawson: I think my hon. Friend is right, that the Leader of the Opposition did make, as usual, a complete mess of it and I think that was why his predecessor a moment ago tried to help him.

Mrs. Margaret Ewing: Does the Chancellor of the Exchequer accept that his arrogant statement today can hardly be interpreted as a consolation to those pensioners who have spent a sleepless night worrying about what will happen? Instead of filling the country with despair and poverty, will he, as an apology, give a commitment that the Government will look carefully at the King's Fund report which shows that British pensioners in general—not a tiny majority—are among the poorest in the world with the lowest life expectancy?

Mr. Lawson: As I pointed out earlier, during the time that we have been in office, the average—the income of the—the real income—the real income, that is, after allowing for inflation the real income of the average pensioner has risen by well over 20 per cent., over 23 per cent., in fact. It was 23 per cent. by 1986 and it is higher today. That is above the average level of increase for the population as a whole.

Mr. Robert McCrindle: Although the targeting of benefits clearly makes a great deal of sense, especially when it is accompanied by additional resources, as my right hon. Friend the Chancellor of the Exchequer has just stated, will he perhaps try to avoid assuming in any future comments that he makes on these matters, that pensioners are either very well-off or on the poverty line, forgetting the large number in the middle to whom, for example, the withdrawal of free prescriptions would be a considerable setback? May I suggest to him that, if his statements over the weekend indicate the beginning of a debate on how targeting and its machinery should be implemented, his comments to the press on Friday will not have been in vain.

Mr. Lawson: I am grateful to my hon. Friend. In fact, the statements, as I said—the statements that appeared in the press on Sunday bore no relation whatever to what I in fact said. What I have said to them is that, while we were absolutely, totally committed to maintaining—

Ms. Clare Short: They will have the shorthand notes.

Mr. Lawson: Oh yes, they will have their shorthand notes and they will know it, and they will know they went behind afterwards and they thought there was not a good enough story and so they produced that. They will know that I said that, while the state pension would continue to be uprated in line with inflation, as we have always said it would, that additional help over and above that ought, in my judgment, to be concentrated on those who are at the poorest end, of pensioners, whose incomes have not risen nearly as fast as the generality of pensioners.

Mr. David Winnick: As all the Sunday newspapers carried virtually the same story, is the Chancellor saying that every journalist who came to the briefing—he has not denied that there was one—misunderstood what he said and that if the choice is between believing what all the newspapers said or what the Chancellor has said today we should somehow believe the Chancellor?
Does the Chancellor of the Exchequer appreciate, however, that he is to be congratulated—and I, as a member of the Opposition, congratulate him—on revealing the Tories' intentions on the hidden agenda and


making it clear that millions of pensioners should indeed be terrified of what would happen if the Tories were re-elected?

Mr. Lawson: It is quite clear that the less salubrious hon. Members opposite, of which the hon. Member who just spoke is a conspicuous example—[HON. MEMBERS: "Withdrawn!"]—are determined to run a scare campaign. In fact, the people of this country will judge this Government by their record and not by the scare campaigns of the party opposite. We saw them before the last election and we remember the result of the last election.

Sir Anthony Grant: Will my right hon. Friend totally disregard the nonsense talked by Labour Members, whose record on inflation, the elderly, the winter of discontent and the Christmas bonuses was utterly disgraceful? In view of the dangers of misreporting to which my right hon. Friend referred, however, would it not be a good idea to refrain from gabbing to the press until policies are clearly agreed and defined?

Mr. Lawson: My hon. Friend of course was once a Minister himself and therefore he speaks with great authority, but he will recall that it is customary for Ministers to talk to the press on an off-the-record basis from time to time.

Mr. Speaker: Statement—Mr. Hurd.

Mr. Robert N. Wareing: On a point of order, Mr. Speaker. Is it in order for the Chancellor of the Exchequer to refer to any right hon. or hon. Member as "less salubrious"?

Mr. Speaker: I have heard worse.

Mr. Winnick: Further to that point of order, Mr. Speaker.

Mr. Speaker: It will take up time and I have already called the hon. Gentleman once.

Mr. Winnick: I am sometimes criticised by my colleagues for the fact that I rarely drink. Should not the Chancellor apologise for his slur? It should make no difference whether a slur comes from the Chancellor or from anyone else. Why can he not apologise?

Hon. Members: Bring him back!

Mr. Speaker: Order. I do not think that the word "salubrious" has anything to do with drink.

Mr. Eric S. Heffer: On a further point of order, Mr. Speaker. May I ask why on some occasions, on issues not quite so important as this, you allow questions to go on for three quarters of an hour but on this fundamental issue for the mass of ordinary people in this country you bring questions to a close in less than half an hour? I should like an answer from you, Mr. Speaker.

Mr. Speaker: I will give the hon. Gentleman the answer. He well knows that there is a difference between a private notice question, which normally goes on for about 15 minutes—this one went on for 25 minutes—and a statement. This was a private notice question and not a statement.

Mr. Heffer: So what?

Mr. Speaker: Just that!

Broadcasting (White Paper)

The Secretary of State for the Home Department (Mr. Douglas Hurd): With permission, Mr. Speaker, I wish to make a statement about the Government's plans for broadcasting legislation. I have laid a White Paper before the House today.
Our broadcasting system has a rich heritage, which is a tribute to the efforts and enterprise of the broadcasting authorities and all those professionally engaged in the broadcasting enterprise. Our proposals seek to build on those achievements in developing services of quality, range and popularity.
Broadcasting is changing fast and this change makes possible a much wider choice for the viewer and the listener. The viewer should not be denied this choice. That is our starting point. The Government should not seek to lay down a blueprint for the future by picking favoured technologies. Rather, we propose an enabling framework with increased opportunities for additional channels as the customer determines. Several dozen television channels and possibly several hundred radio services may be in prospect.
Subscription, which enables the viewer to signal his preference to the broadcaster directly, will have a greater role to play. There will he a greater separation of the different activities that make up broadcasting, including programme production, the assembly of individual programmes into channels and transmission and service delivery.
The ownership of commercial television and radio should be widely spread. The White Paper contains detailed proposals to ensure that the control of television and radio services is not concentrated in the hands of a few groups or individuals and to prevent excessive media cross-ownership. The Government are determined to keep the market open to newcomers and to prevent any tendency towards editorial uniformity.
Safeguards on minimum standards are needed to protect viewers and listeners from shoddy wares and exploitation. Subject to those, they should be able to exercise greater choice over what they hear and see. While some important positive programming obligations are retained, we envisage a substantial liberalisation, especially of the ITV system, and greater reliance on the viewer, rather than the regulator, to sustain range and quality.
Those are the principles that have guided us. Our thinking has been influenced at many points by the Peacock report and by the admirable report in June of the Home Affairs Committee of this House. I hope that right hon. and hon. Members will find the time to read the White Paper in full, but I shall give a brief outline of the main practical proposals.
We propose that a new fifth channel, with 65 to 70 per cent. national coverage, should be authorised to begin broadcasting at the start of 1993. Different companies could provide the services at different times of the day, but the channel would be nationally based. A sixth channel will also be authorised if technical studies show it to be feasible.
We propose a new flexible framework for the development of multi-channel local services through both cable and microwave transmission, known as MVDS.

That will make possible a further extension of viewer choice. It will also provide new opportunities for local television in cities and for television services catering for minority interests.
British Satellite Broadcasting plans to start its three channel direct broadcasting by satellite—DBS—service next autumn. The Government gave BSB an undertaking last year that the United Kingdom's fourth and fifth DBS channels would not be allocated until BSB's service had been in operation for at least three years. BSB has recently said that it would be willing for that moratorium to be lifted. Accordingly, the United Kingdom's two remaining channels will be advertised early next year. Five high-quality DBS channels should soon be available to British viewers.
Viewers will continue to receive other satellite services directly, including those from proposed medium-powered satellites. We continue to work for international agreement for the supervision of programmes in such services and shall propose to Parliament sanctions against any unacceptable foreign satellite services received here.
The present ITV system will become a regionally based Channel 3. Licence holders will, for the first time, have a statutory obligation to provide regional programming, including programmes produced in the region.
The distinctive remit of Channel 4 will be retained and reinforced to sustain high quality programmes in the commercial sector. We consider that, after the necessary legislation, advertising on Channel 4 should be sold separately from that on Channel 3. Subject to those points, the White Paper sets out options on the future constitution of Channel 4. The Welsh Fourth Channel Authority will continue in essence unchanged.
All those commercial television services will be free to decide their own mix between advertising and subscription funding and will have greater freedom to raise money through sponsorship, subject to proper safeguards. All will be subject to consumer protection obligations on programme content. Most commercial television licences, including those for Channel 3 and Channel 5 services, will be allocated by competitive tender, subject to a quality threshold defined in the White Paper. Operators of Channels 3, 4 and 5 will be expected to show high-quality news and current affairs programmes dealing with national and international matters and to show the news, and possibly also current affairs, in main viewing periods. Channel 3 and Channel 5 will be expected to provide a diverse programme service appealing to a variety of tastes and interests to ensure that a minimum of 25 per cent. of original programming came from independent producers and that a proper proportion of programme material is of EC origin.
There will be one additional requirement affecting Channel 3 only. There will be continued provision, like that which brought ITN into existence, to ensure that there is at least one body effectively equipped and financed to provide news for Channel 3. There will be safeguards for the continued provision of a schools programmes service.
The Government agree with the Home Affairs Committee that a new agency, which might be called the Independent Television Commission, should be established, in place of the Independent Broadcasting Authority and the Cable Authority, to license and supervise all parts of the commercial television sector. It will be able to operate with a lighter touch than the IBA and without the


IBA's detailed involvement in scheduling but, as the White Paper sets out, it will have strong sanctions against failure by its licensees to live up to their licence conditions.
The BBC will be expected to continue to provide high-quality programming across the full range of public tastes and interests. The Government look forward to the gradual introduction of subscription on the BBC's television services and to the eventual replacement of the licence fee—which will, however, continue at least for some time to come. We propose that the night hours from one of the BBC's channels should be assigned to the new ITC for allocation, like other licences by competitive tender. The BBC would keep the other set of night hours on the basis that it used it as fully as possible for making a start in developing subscription services.
We envisage that the part played by independent producers in programme making in the United Kingdom will continue to grow, as future licensees will be free to operate as publishers, without programme production capacity of their own. We believe that the transmission infrastructure should be separated from the programmes services.
The Government propose to proceed with the plans that I announced to the House on 19 January for the deregulation and expansion of independent radio, under the light touch regulation of a new Radio Authority. There will be scope for three new national commercial stations and as many as several hundred local services, including community radio stations.
The Broadcasting Standards Council, already established to reinforce standards on sex, violence, taste and decency, will be placed on a statutory footing. We propose that the exemption of broadcasting from the obscenity legislation should be removed at the earliest opportunity.
That is a brief summary of the main proposals set out in the White Paper. We aim to ensure that viewers and listeners have greater freedom of choice from a more varied output of programmes, including programmes of high quality. British television has a deservedly high reputation in the world and we expect that reputation to grow with the new opportunities that are now in sight.
The House will have an opportunity to debate the proposals before they are put into legislative form. We shall also take careful note of views expressed outside the House. We shall then bring forward legislation.

Mr. Roy Hattersley: Is the Home Secretary aware that his White Paper announces a number of aspirations for broadcasting with which the Opposition are in wholehearted agreement? We welcome the expansion in broadcasting and recognise the consequent need for changes in organisation. However, we at least know that expansion can bring diversity and high quality only if it is carefully regulated. The Home Secretary, having proclaimed the virtues of choice and quality, makes proposals that will result in a reduction in both.
Does not the right hon. Gentleman realise that, while competition has undoubted benefits in some areas of economic activity, the doctrinal obsession with markets revealed in his White Paper is bound to have an adverse effect on broadcasting? It is just not possible to pretend that viewers are given more choice if what they are offered is, in truth, just a number of extra channels that show

programmes that are increasingly indistinguishable from each other and of a steadily deteriorating quality. That is the prospect which the White Paper holds out.
Will the Home Secretary consider the consequences of auctioning Channel 3 franchises to the highest bidder? It can result only in a deterioration in programme quality, which the minimum standards, laid down in paragraphs 6.10 and 6.11, will do little or nothing to arrest. Programme companies that obtain franchises from the highest bids will be forced into sacrificing new investments and the production of high-cost programmes. The Home Secretary has already conceded that some deterioration is already inevitable, by apparently removing from Channel 3 companies the specific obligation to broadcast high-cost drama, documentary and religious programmes. As a result, the new ITC powers that he announced today—that is, formal warning, right to revoke a franchise, and perhaps even the imposition of fines—are no more than window dressing. They are sanctions that reinforce regulations that are not in themselves strong enough to ensure high quality.
Does the Home Secretary not realise that standards will deteriorate even further when the competition that he claims to seek is reduced by the concentration of ownership? Will he confirm that, in paragraph 6·48, he asserts the need for ownership to be widespread, then announces the abandonment of present controls, and finally confesses that the Government do not have the slightest idea what regulation to put in their place? I make a prediction: they will not be regulations to which Mr. Rupert Murdoch takes exception.
The likelihood of increased uniformity has been heightened by the Home Secretary's decision to require Chanel 4 to sell its own advertising. In paragraph 6·23 of the White Paper, he reaffirms the importance of Channel 4 catering for tastes and interests not served by other independent channels. By forcing it into direct competition for advertising, he reduces the chances of Channel 4 providing such essential programmes. Does not the opinion of the Peacock report, which is quoted and endorsed in paragraph 32, illustrate the Home Secretary's basic error? That quotation asserts that the BBC must continue the production of high-quality broadcasts, because, even in a fully developed broadcasting market, independent companies will neglect such broadcasts. The White Paper makes that neglect more likely, and it does not help the BBC to perform its proper function.
The BBC is to be subject to what the White Paper elegantly calls—although the Home Secretary wisely did not refer to the phrase in his statement this afternoon—a "double squeeze". The value of the licence fee is likely to fall, and there can be absolutely no assurance that the necessary additional funds can be raised by subscription television; nor is subscription television a suitable way for the BBC to raise a major part of its revenue.
Paragraph 24 of the White Paper refers to subscription making it easier for high-quality programmes to be aimed profitably at particular sections of the market. The clear implication of that statement is that those who cannot afford high quality—the old and the poor in particular—will not get it. Clearly, the BBC will not be able, nor should it be prepared, to rely on subscriptions for a large part of its income. The result of the double squeeze is certain to do desperate damage to radio in particular, a subject to which the White Paper devotes an insulting page and three quarters.
Paragraph 8.7 includes the ominous message that BBC radio will rely on licence fees for some time to come, but there is no suggestion of how BBC radio will be financed when, as the Home Secretary intends, the licence fee is abolished. We have no doubt that the Government mean that, sooner or later, all radio will be commercial radio, and that will be a disaster. [HON. MEMBERS: "Why?"]
I conclude by asking the Home Secretary three specific questions. The statement says that Channel 3 companies will be free to decide their own mix between advertising and subscription. Does that mean that a company will be free to move to financing, predominantly based on the limited subscription system, or will a minimum figure be specified by the Home Secretary?
Secondly, will the Home Secretary explain the real meaning of his restrictions on control—the word in the White Paper—by non-EC companies? Am I right to fear that it will still be possible for an American conglomerate to own, either directly or through a subsidiary, companies broadcasting in Great Britain?
Thirdly, will the right hon. Gentleman assure us that the powers of the Broadcasting Standards Council, the "other things" that the White Paper coyly says are to be discussed with Lord Rees-Mogg, will not include the right to preview specific broadcasts?
This White Paper reflects commercial values rather than broadcasting values, as is to be expected from a policy that owes more to the Department of Trade and Industry than it does to the Home Office. It pretends to offer choice. In fact, many of the new channels will do no more than offer vast profits to the tycoons of international television. It is a giant retreat from the concept of public service broadcasting. Its result will be less diversity and lower standards.

Mr. Hurd: I think that the right hon. Gentleman must have written the last bit of his speech before he read the White Paper. As usual, his preliminary demonstrations bear little relation to what is actually proposed. This has not been a doctrinal exercise; it is something that we have worked at for a long time now to achieve the right balance between wider choice and the insistence on quality. I do not disagree with the original points that the right hon. Gentleman made and which he put in his lecture at Hexham last week. That is our aim, and I believe that we have found a sensible, practical way of doing that.
I refer to the right hon. Gentleman's specific points. On competitive tender, he has fixed on one point of what is essentially a three-part exercise. Somebody bidding for a franchise will first have to pass a quality threshold. That is not just consumer protection against pornography, excessive partisan politics, and so on. There are some specific things in the White Paper about diversity, about regionality—the regional content of programmes—about schools, and about news and current affairs. When that test is passed—it will be a stiff test—there will be the competitive tender, and then there will be the monitoring and enforcement by the new ITC of the quality threshold in operation.
If the right hon. Gentleman reads the White Paper and sees what is said about the yellow card, the red card, and the possible renewal of franchises, he will see that the business of enforcement is actually more specific that it is under the present arrangement. If he looks at those three stages all together, he will see that this is a serious balance between quality and wider choice.
Again, I entirely agree with what the right hon. Gentleman said in his speech about ownership on Friday. It is important, as the White Paper states, and as the right hon. Gentleman thought we were not going to say, that there should not be a concentration of ownership. Paragraph 6·48 states:
But clear rules will also be needed which impose limits on concentration of ownership and on excessive cross-media ownership.
In paragraph 6·53 of the White Paper, we set out various stringent rules on which we invite comments. If the right hon. Gentleman reads the White Paper, he will see that they include
no licence holder for a particular area should control other broadcast media for that area".
Then there is the relationship between United Kingdom satellites and franchises and international franchises. There is also the relationship between newspaper interests and the media. It is all there; it is just that the right hon. Gentleman has not got quite as far as that in his reading of the White Paper. If he looks at paragraph 6·50, he will see the answer to one of his specific questions about the control of franchises by non-EC companies.
We invite precise comments on possible ideas, but the principle of choice between various severe forms of regulation—that is surely what the right hon. Gentleman would expect of us—is there, and it is severe.
We are entirely clear that preserving the remit of Channel 4, with which the right hon. Gentleman also agrees, is an important part of getting the balance right. We set out different ways in which Channel 4 might be organised to preserve the remit while selling its own advertising. When the House looks in detail at those three options, we shall be interested to have a choice between them. I believe that we can all agree on the presentation of the remit, and that there can be a reasoned argument about how best to achieve it.
The right hon. Gentleman spoke about the BBC and the licence fee. I think that the BBC can be—I am trying to choose my words carefully—reasonably satisfied with the position. Between now and 1991, the licence fee will be indexed and increased in line with inflation as it was a week or so ago. After 1991, we shall discuss with the BBC the extent to which it would be reasonable to limit indexing to take account of what may have been earned by subscription. Subscription is an attractive idea, as I told the House when reporting on the Peacock report. We shall have to see how far it will go and in what form, but the BBC is being given a nudge in that direction, which I consider entirely reasonable.
When he talked about radio, the right hon. Gentleman neglected the fact that we have discussed it, and that Government publications on it have been produced. I am sorry that there is not legislative time in the immediate future for a radio Bill. I am keen to get on with the proposals for radio, which were well received at the time and which are rehearsed in summary form in the White Paper. But there is no neglect there; it is simply a matter of finding legislative time.
Having answered one of the right hon. Gentleman's specific questions, I shall now answer the other two. There will be no tilt in the balance between advertising and subscription: it will be open to the successful franchise holder to achieve a balance that he considers sensible. As for previewing, the White Paper does not add to what I have already told the House about the Broadcasting


Standards Council. It will be put on a statutory basis. Lord Rees-Mogg, the chairman, is now discussing with the broadcasting authorities how he would operate, and he is making some progress in working out agreement on standards. [Interruption.] The right hon. Gentleman should be interested and approving, because this fits absolutely into his general approach—at least, I hope it does. Lord Rees-Mogg will let us know what he believes, in the light of the discussions, to be the right statutory basis for his authority, and we shall make proposals accordingly.
Having listened to the right hon. Gentleman, I believe that the difference between us is that he believes that the only way to sustain quality successfully is by restricting choice. [HON. MEMBERS: "No."] That is the thrust of what the right hon. Gentleman has been saying. But we consider it a negative approach, which puts too much faith in the virtues of detailed bureaucratic regulation—which we have at present and which the IBA has been conscientiously discharging, but which we believe becomes otiose as wider choice is made available. We believe that our proposals offer the right balance between giving wider choice to the viewer and sustaining quality.

Mr. John Wheeler: Does my right hon. Friend agree that today's statement and the remarks that he has just made will be warmly welcomed not only in the House but outside it? He is balancing carefully the era of change that is about to enter the broadcasting industry, and permitting the public the widest possible choice. His statement will be warmly received by members of the Select Committee on Home Affairs, many of whose key recommendations he has included in the White Paper.
Does my right hon. Friend accept that one of the main aspects of today's proposals is that the new "light touch" arrangements for the regulation of commercial television will be essential to maintaining the quality and standards of British television in the commercial sector, for which this country is rightly famous?
Let me conclude by saying that I would rather that the new authority was called the Commercial Television Authority.

Mr. Hurd: I am grateful to my hon. Friend. He and his colleagues on both sides of the House certainly did a sterling job in producing their report, which undoubtedly influenced us at several points, including the proposal that the IBA and the Cable Authority should be merged into a single new body. As long as it smells sweet, I am not too passionate about its name, and we shall have plenty of opportunities to discuss that.
I agree with my hon. Friend that much will turn on the arrangements for the quality threshold, which I described in answer to the right hon. Gentleman and of which he neglected to take account. The arrangements for sustaining quality involve doing away with the detailed processes of scheduling and regulation of the ITV sector. They involve the BBC, which he called the cornerstone, the Channel 4 remit, the consumer protection provision for Channel 3, positive requirements for Channel 3, including news, schools and diversity, and the more rigorous proposals—the yellow card, the red card and the renewal of franchise arrangements. Taken together, I think that those proposals are an important part of the package.

Mr. Robert Maclennan: Does the Home Secretary recognise that my right hon. and hon. Friends greatly welcome the extension of consumer choice implicit in the new broadcasting technologies and in increasing competition? Does he also recognise, however, our extreme concern that he has not realised that the increasing multiplicity of channels will not of itself ensure that the public enjoy the quality and variety that we have experienced in this country, which is the envy of the world?
Does the right hon. Gentleman not recognise that the arrangements for competitive tendering for Channel 3 in particular will take money out of independent television, which could result in inferior programming, a narrowing of choice or a combination of both? Does he not recognise that the pace of technological change is not so fast that it requires us to abandon a regulatory regime that has uniquely secured for this country its rich, balanced mixture of entertainment, information and education, and of popular and minority programmes for everyone? Does he not recognise that the public are as interested in quality as in diversity? Channel 4 has been a brilliant achievement. Does the right hon. Gentleman not recognise that it has succeeded because it has had a secure source of finance, and that that has not been secured in the White Paper?
Finally, does the right hon. Gentleman acknowledge that some ambivalence has appeared in his statement, and indeed in the White Paper, between his commitment to what he calls a "light regulatory touch" and his emphasis on the significance of positive programme requirements? In which does he believe?

Mr. Hurd: I must say that the fizz seems to be going out of the attack. Let me say with the greatest courtesy that I have always regarded the hon. Gentleman as one of nature's regulators. He would naturally put emphasis on a detailed system of regulation to remedy every ill, but I feel that television is moving out of that system.
Of course I agree with the hon. Gentleman's main point, that wider choice might not automatically mean diversity. But our proposal is that it should—that it must. There should not simply be a wider choice between quiz shows on different channels. If he reads the White Paper, the hon. Gentleman will see that the thrust of its proposals is to ensure that wider choice for the viewer is real choice, and not simply a choice between identikit shows. He believes that the right way to achieve that is to bring all new opportunities such as the satellite and Channel 5 under the same detailed control, with numerous officials sitting down and regulating exactly what [HON. MEMBERS: "No."] That is a consequence of the hon. Gentleman's rhetoric. I do not believe it. I believe that television in this country is fast growing out of that framework. We need a new framework ensuring diversity, as the hon. Gentleman mentions, but not relying for that diversity on this kind of nit-picking.

Sir Peter Blaker: Will my right hon. Friend say a little more about cable, in which he knows that I have an interest? Is it still the policy of Her Majesty's Government to maintain conditions in which, given entrepreneurship on the part of cable television companies, the urban areas of the United Kingdom will have the prospect of being cabled within a reasonable time, with the opportunities that that will bring of interactive services and more competitive telecommunications?

Mr. Hurd: Yes, indeed. For various reasons cable has made a slowish start, but it is beginning to pick up. That is both good news and important. We now have the new technology, MVDS, and it was consideration of that which held us up for several weeks. The question is how that new technology should be used. Should it be used simply and solely to help cable forward, or should it be possible for people to use that technology independently of cable? Cable will want to use that technology, and that is entirely legitimate. My right hon. Friend will see from the White Paper the rather complicated balance that we are trying to strike, safeguarding the interests of the existing cable franchise holders and perhaps of those applying now, while not harnessing MVDS technology absolutely to cable. I believe that there is room for both, and certainly, as I know my right hon. Friend hopes, for cable to use MVDS to facilitate its growth.

Mr. Gerald Bermingham: Will the Home Secretary accept that, if there is to be choice, the choice must be for all, and that for choice for all, all modes of communication must be available to each and every person? For those in rural areas, that means cable and satellite as well as the five terrestrial channels proposed. Does the Home Secretary agree that the track record of cable in the past few years has been more than a little disappointing? Does he further agree that the White Paper does little to encourage the companies to increase cabling across the country and that without cable and other modes being available to rural and other areas, there cannot possibly be choice for all?

Mr. Hurd: The hon. Gentleman has gone a little astray. A whole series of technologies are moving forward. We have terrestrial television which can reach more people and use more of the spectrum than previously; we have cable, MVDS, satellite and, most important, radio. All are poised for further development. I do not know, and the White Paper does not pretend to guess, which will turn out to be acceptable more quickly than others. That is why I say that we must enable development rather than declare a blueprint. The White Paper takes each to see how we can create a framework into which it can be fitted. The hon. Gentleman may be right about cable and I do not deny what he said. It is now progressing fast after some disappointing years. But I do not think that he is arguing that we should put taxpayers' money into it, as other countries have. Let it be enabled together with the other technologies and we shall see what viewers and entrepreneurs make of it and whether it is the preferred technology.

Sir Geoffrey Johnson Smith: I welcome my right hon. Friend's recognition that the television industry must adapt and that the changes proposed in the White Paper offer an exciting challenge to the industry and a wider choice to viewers. Anyone who has been to the lightly regulated market of New York will know that our choice is extremely restricted. Does my right hon. Friend recognise that, even among those who welcome his proposals, some are worried about some of them—for example, the tax on turnover? If that is not sensitively handled, it could undermine the ability of independent television companies to cope successfully with the increased competition and to provide a greater quality of

programming under the new regime. Will my right hon. Friend assure the House that he will listen to those anxieties?

Mr. Hurd: I entirely accept that, as the dust settles, hon. Members like my hon. Friend, who knows the industry well, will want to raise a large number of specific and practical points. There is an immediate problem about the nature of the levy in this transitional period, and I owe the industry a decision and statement about that soon.My hon. Friend asked about the permanent arrangements. We believe that there is a strong case on the grounds of encouraging efficiency to move from a profits-based to a revenue-based levy. That principle is set out in the White Paper. Obviously, we shall listen to representations about how that should be worked out and applied.

Dr. David Owen: I welcome the diversity and the choice inherent in these proposals, but does the Home Secretary accept that concentration of ownership is a crucial issue? Unless the House can be satisfied on that issue, it would be unwise to deregulate to the extent which he asks the House to accept. Having long argued for an auctioning of licences on Channel 3 and Channel 5, may I ask whether the sum of money that comes in, which could be considerable, will be earmarked for public service broadcasting, particularly on Radio 4 and BBC 2? The Home Secretary asked for views about Channel 4. I hope that he will retain it as a non-profit-making company, although taking advertisements.

Mr. Hurd: I am grateful to the right hon. Gentleman for his first point, and I agree with it. Measures against the concentration of ownership are crucial, and I would not come before the House with a Bill for deregulation which did not also include measures against the concentration of ownership. That is set out in the White Paper—

Mr. Hattersley: No, it is not.

Mr. Hurd: —when the right hon. Gentleman has read that far. I agree with the general point made by the right hon. Member for Plymouth, Devonport (Dr. Owen).The proceeds of the competitive tender will be earmarked for the Treasury as the public's receipt from franchises of leases of a public asset. I am sorry, but I have forgotten the right hon. Gentleman's last point—

Dr. Owen: Channel 4.

Mr. Hurd: I note what the right hon. Gentleman said about Channel 4. He has already chosen one option, and we shall be glad of views from all sides on that matter.

Mr. John Gorst: In welcoming my right hon. Friend's statement, may I say that it is the most culturally literate development in broadcasting in the 33 years since the BBC lost its monopoly? Will he bear in mind the fact that, during the past 33 years, the Opposition have continuously said that improvements in broadcasting can take place only as a result of the iron grip of regulation and control? At this point, would my right hon. Friend summarise the criteria and principles which have guided the 20 or so new developments contained in this White Paper?

Mr. Hurd: I hope that it breathes through the White Paper that quality and a wider choice for viewers and listeners go hand in hand at the top of the list.


Independence, meaning a proper place for independent producers and independence against the concentration of ownership, probably comes third. Although the Government would not enforce this, reality will: that viability is the fourth. In other words, the proposals must make sense in terms of what viewers are prepared to accept and finance. Those four—quality, choice, independence and viability—are the criteria.

Mr. Norman Buchan: Does the Home Secretary accept that this is not only a bad day for Britain, but for the reputation of Britain in the world? Our broadcasting system has been the great jewel of our reputation both culturally and educationally. He has never understood that its excellence depends on regulation, that regulation ensures diversity of programme and opinion, and that more channels of themselves do not ensure more kinds of programmes. Does the Home Secretary agree that the majority viewing that has been built up for apparently specialist programmes, such as the Attenborough and Bellamy programmes, will not happen under a wholly commercial structure?
Does the right hon. Gentleman agree that he is proposing a minor ghetto for public service broadcasting and commercial freedom for cash for media entrepreneurs? Does he agree that the so-called "light touch" is a means of ensuring that the only competition that will take place will be between different kinds of pap? Is it not time that the Home Secretary took the whole damn lot—Peacock, the Green Paper and himself—out of this Chamber? Is it not time that we took broadcasting away from the Home Office and gave it to a proper Ministry that was interested in standards and programmes?

Mr. Hurd: I know that the hon. Gentleman has always been in favour of a Ministry of Broadcasting, and indeed a shadow Ministry of Broadcasting, and I do not object to those perfectly legitimate ambitions. I remember him posing away the other night in the Sinn Fein debate about the White Paper making the world safe for Murdoch and Maxwell. At least he has not repeated that today. Unlike the right hon. Member for Sparkbrook, perhaps he has read paragraph 6·48, which deals with the concentration of ownership. Those who run BBC 1, BBC 2 and Channel 4—three of the four existing terrestrial channels—would be a little surprised to hear themselves described by the hon. Gentleman as a "minor ghetto" in British broadcasting. They are not. Those three channels will sustain exactly the responsibilities that they have now and which the hon. Gentleman wishes to preserve. I do not agree with the hon. Gentleman. He speaks with the genuine voice of the old-fashioned regulator, whom time has passed by.

Several Hon. Members: rose—

Mr. Speaker: Order. I remind the House that the Home Secretary said that there will be a debate later on the White Paper. I request hon. Members to ask single questions, not to go into the matter in great detail, because they will have other opportunities. On that basis, I shall allow questions to continue for 15 minutes.

Sir Philip Goodhart: Tens of millions of dollars have been spent on political television advertising in the American presidential elections, which are

mercifully coming to an end. Will my right hon. Friend assure us that the new broadcasting arrangements will prevent direct or indirect political advertising on the air?

Mr. Hurd: Yes, I give my hon. Friend that assurance.

Mr. Eric S. Heffer: I shall obey your strictures, Mr. Speaker. I should tell the Home Secretary that no Opposition Member has seen the White Paper because it has only just come in. The Home Secretary talked about quality control, but who will carry out that control? Who will determine it? Can we ensure that in future, instead of the trivia that we increasingly get on television, with all these game shows, we shall have programmes such as "Brideshead Revisited", the Miss Marple series and "Fortunes of War"? How can he guarantee that we will get such quality programmes if the interests of profit come first?

Mr. Hurd: The answer to the hon. Gentleman's question is, the BBC and the ITC. Those who run the BBC will continue to supply the hon. Gentleman with Miss Marple to his and their hearts' content: there will be no change in that respect. The ITC will require variety and diversity from the applicants for franchises. It will be impossible for someone successfully to bid for a franchise, however long his purse, if he is proposing to broadcast only a series of quiz shows.

Mr. Toby Jessel: As to radio, does my right hon. Friend accept that the high standard of British music, which is a national asset, owes a great deal to the BBC's Radio 3? Will he enlarge on what action the Government intend to take in the long run to uphold the high musical standards of Radio 3?

Mr. Hurd: That is a matter for the BBC. Nothing in these proposals would prevent that from continuing.

Ms. Diane Abbott: Will the Secretary of State accept that I and my hon. Friends are impressed by the stand that he is taking against the concentration of ownership in television? What steps will he and his hon. Friends take to guard against the concentration of ownership in the print media? Will he assure us that there will be no exceptions to such concentrations of ownership, even if the companies involved are the most fervent supporters of the Government?

Mr. Hurd: I gladly swallow the hon. Lady's compliment, but I shall not answer her second question. Because of the breakdown of restrictive practices in the press it is becoming increasingly possible, locally and nationally, to produce newspapers at lower prices—[Interruption.] The hon. Member for Paisley, South will be calling The Independent a poor ghetto in a minute.
That is what is happening, and it is a healthy development.

Mr. Roger Gale: I congratulate my right hon. Friend on his proposals to abolish the IBA and to establish an Independent Television Commission to take broadcasting into the 21st century. Will he consider an expansion of that to include telecommunications? May I express the hope that the excellent IBA engineering division will be invited to tender for the new privatised transmission systems? What plans does my right hon.


Friend have to encourage investment in cable television and to relax the regulations governing overseas investment in cable?

Mr. Hurd: We are considering the matter raised in my hon. Friend's second point, although it is not defined in the White Paper. On the first point, important transitional arrangements will have to be made for the IBA. We have begun to discuss that with the authority, and this morning I had a word with the chairman and director general, who stressed the importance of the matter. I entirely understand that. They have a staff—a skilled staff—to consider. None of the changes can take place before Parliament has approved the necessary legislation. That will give us time to formulate transitional arrangements to deal with the points made by my hon. Friend.
Neither I nor the White Paper join in any denunciation of the IBA. Although I criticise the bureaucratic niggling, I recognise that that is the job which Parliament laid upon the authority in the 1981 Act and which the hon. Member for Paisley, South (Mr. Buchan) continues to glorify. Time has moved on and passed that by, and the detailed regulation that the authority has carried out, as Parliament wished, is unnecessary. But that does not mean that those who have carried it out should be condemned.

Mr. Austin Mitchell: We can all sympathise with the Home Secretary in his humiliation at having to introduce this glossy distillation of the prejudices of Lord Young of Graffham, Saatchi and Saatchi and the Prime Minister. But the grubby changes in the ITV franchises and the abolition of the IBA pose a direct threat to serious programming, especially to current affairs, which is likely to undermine the basis of "World in Action", "First Tuesday" and "This Week" and to cause them to go the way that "Weekend World" has gone. What became of the old Conservative maxim, "If it ain't broke, don't fix it"?

Mr. Hurd: I do not blame the hon. Gentleman, who unlike the right hon. Member for Sparkbrook, has not had time to read the White Paper. Had he read it, he would have seen that standing out among the positive requirements of any applicant for a Channel 3 franchise will be the provision of news and current affairs programmes at times when people are viewing or listening. Moreover, section 22 of the Broadcasting Act 1981 provides that there should be at least one organisation providing high-quality news and international news that is sustained by the franchise holders. That is the basis of Independent Television News and that will be preserved. The hon. Gentleman's fears are unfounded.

Mr. Jonathan Aitken: Will my right hon. Friend clarify precisely what the White Paper means when it says that the new Independent Television Commission will have a lighter regulatory touch to encourage lighter programme requirements? Does my right hon. Friend agree that ITV programming has not always been noted for its gravity and that the IBA has not always been noted for its severity? How does he answer the fear that a lighter regulatory touch may mean television stations with the editorial standards of the lower tabloids?

Mr. Hurd: I do not think that my hon. Friend's conclusion follows from his premise. The fact that he disagrees with some decisions made by the IBA does not justify the existence of much detailed bureaucratic

scheduling, most of which never reaches the light of day but is carried out conscientiously by the IBA as part of its present duties. It is not tenable to continue that. That is what we mean by the "lighter touch".

Mr. Tony Banks: How does the Home Secretary expect the House to take seriously his assurances about preserving standards in broadcasting when he is to abolish the IBA and is announcing his intention to move towards privatising the BBC? How moveable is he in this consultative document? If there is much protest about, for example, the abolition of the IBA, will he come to the House and say, "I accept what has been said"?
May I congratulate the Home Secretary on being the first Minister who has not succumbed to the temptation of putting his own grinning face on the front page of a glossy White Paper? That self-denying ordinance should be referred to all members of the Cabinet.

Mr. Hurd: I am obliged for the hon. Gentleman's second point. I believe that the IBA should be moved together with the Cable Authority. To be honest, that was not a view that we had firmly reached before we received the report of the Select Committee on Home Affairs, which recommended it. It is common sense to bring together those regulatory authorities and give them a common framework in which to operate. That is what we are proposing and that is something to which we will hold.

Mr. Jeremy Hanley: Does my right hon. Friend agree that, if one listened to the Opposition, one might think my right hon. Friend had introduced reform for reform's sake rather than reform being forced on the Government by changing technology? Has not the White Paper been a rational, sensible and practical way forward for the future of broadcasting? What effect does my right hon. Friend expect there to be on the BBC when the BBC and the IBA are separated from the licence fee regime? The IBA is currently received in conjunction with the BBC, and only if the BBC licence fee is paid. Secondly, at what level does he believe the subscription would be for IBA viewers—who, after all, currently receive that service free?

Mr. Hurd: I am not entirely following my hon. Friend's point, but we believe that subscription is attractive in principle. The BBC is beginning to experiment with it on one of its night channels; so, too, is the satellite DBS. There is scope for further experimentation, and we propose to nudge the BBC in that direction, without being dogmatic at present as to how far that could go.
If my hon. Friend was talking about the point raised by the right hon. Member for Sparkbrook, of course, BBC radio is a problem. BBC radio is financed out of the licence fee and there is no question of doing away with it, because I regard it as essential to the general structure of broadcasting. As we move towards subscription, that will be a problem which will clearly come on to the agenda fairly soon. I accept that, but we are not at that stage yet. We are at the stage of indexing the licence fee and taking account after 1991 of the extent to which the BBC might reasonably benefit from subscription income. I hope that that meets my hon. Friend's point.

Mr. Jeff Rooker: I have not read paragraph 6.48, which the right hon. Gentleman constantly referred to, which is about the concentration of


ownership. However, is the concentration of ownerhsip specific to television or does it cover also the concentration of ownership within the media? Frankly, with the amount of media and press publishing controlled by Murdoch and Maxwell—I do not mean "the Murdochs" and "the Maxwells"; I mean Murdoch and Maxwell—they should not have even a finger in the pie of any television company. Does the concentration of ownership cross over from television to the press, or is the paragraph exclusive to television? If so, it does not go far enough.

Mr. Hurd: Yes, that is why, in paragraph 6·53, one of the principles that we lay down is:
national newspaper interests in national services using United Kingdom broadcasting frequencies (and vice versa) should be limited; and a similar principle should apply in the case of local services and the local press. One possibility"—
not going as far as the hon. Gentleman would like—
would be to follow the reciprocal 20 per cent. limit already proposed in the case of radio".
However, we go further than that, because another conceivable mischief is that people who own a lot of international television would move in and take franchises; that, too, is covered in this part of the White Paper. We would have to ensure that they did not get the franchises.

Mr. John Greenway: I am sure that my right hon. Friend will agree that regional television companies will greatly welcome the Government's continuing commitment to the regional structure of ITV. I note in paragraph 2 of the annex to the report that the function of the ITC will be to decide with the Government on that regional structure. Can my right hon. Friend tell us how he sees that structure regionally compared with the present structure? Does he accept that the important role of the ITC means that it is essential that a chairman for the new authority is appointed at the earliest possible opportunity?

Mr. Hurd: As my hon. Friend knows, what we need in the near future is a successor to Lord Thomson of Monifieth as chairman of the IBA. What follows for the ITC is something that can be settled a bit later, because the ITC is so far just a proposal in a White Paper which Parliament will want to debate and reach conclusions on.
My hon. Friend mentioned an important point about the regions. We do not think it would be sensible for the Government to lay down in a White Paper the exact frontiers of the regions. My hon. Friend comes from a part of the world where that is a live issue from time to time. I believe that that is something that Governments should have at arm's length and which the new ITC should settle. However, we are emphatic that the regional principle should not only be kept, but should be strengthened when we are dealing with Channel 3 and the ITV franchises.

Mr. David Clelland: Does the right hon. Gentleman agree that, even if the Government were to succeed in preventing a concentration of ownership, the danger is that an increase in competition for advertisers, together with the so-called "light touch" regime, will mean that the overwhelming influence will be in the hands of the advertisers? That will lead to restrictions in choice and the lowering of standards. That has been the experience of every country that relies on competition rather than regulation.

Mr. Hurd: I do not believe that is entirely right. Channel 4 is doing well. It is paying for itself and has carved out for itself a particular form of advertising market that obviously works. There is a strong argument that Channel 4 could be completely privatised and still retain that rather special advertising finance which would enable it to keep the remit. There are counter-arguments, which are set out in the White Paper. I do not agree that it has been the experience up to now that keeping a certain number of channels financed by advertisers has the effect to which the hon. Gentleman referred.

Mr. Michael Morris: As the Minister of State has been defending the United Kingdom's commercial interest so well over the Council of Europe draft convention, can my right hon. Friend the Home Secretary tell us that there are no proposals in the White Paper that will fall foul of that convention? Additionally, will the proposals on the BBC mean a change in the BBC's charter?

Mr. Hurd: My hon. Friend's first point is quite right. My hon. Friend the Member for Mid-Sussex (Mr. Renton) has been doing noble work in trying to reach an international agreement in the Council of Europe, which is dealt with in the White Paper. We are keen that that should be concluded. My hon. Friend has made a good deal of progress in resolving the difficulty about advertising breaks. Other member states of the Council of Europe have raised difficulties, but we hope to have a further meeting in Stockholm later this month, which my hon. Friend will attend, and it is possible that decisive progress will then be made.
The BBC charter expires at the end of 1996 and there are no proposals to seek to alter it before then. I suppose that those people who are around in 1994 will begin a new debate about what the revised charter should contain. At that stage, some of the points mentioned today and contained in the White Paper will come to the fore, and by then we shall know more about the way subscription has gone.

Mrs. Margaret Ewing: Does the Home Secretary accept that many of us are deeply concerned about the regional implications due to the failure of the White Paper to bring forward a clear framework on the takeover procedures, because it seems likely that powerful predators will be able to put profit before variety, standards and quality? Can he tell us why there is no specific reference to SC4 and the provision for Gaelic, as there is for the Welsh channel and the Welsh language?

Mr. Hurd: There is provision, because my right hon. and learned Friend the Secretary of State for Scotland insisted that there should be. If we cannot find the reference in the next few seconds, I will inform the hon. Lady later. The provision is there, it is very specific and it will fully satisfy.
I have been informed that it is paragraph 6·37. It says:
The Government recognises the importance of broadcasting to the Gaelic language and its future development and, while no change is implied in present policies towards Gaelic broadcasting at national or regional level, new local services could be an important means of meeting Gaelic needs.
It is better news for the hon. Lady.

Mr. Peter Griffiths: Does my right hon. Friend agree that the main barrier to the effective exercise of popular choice on television is the continued


existence of the BBC licence fee? If the evidence is that subscription will not lead to an early demise of the licence fee after 1991, will my right hon. Friend be ready to consider alternative forms of funding for the BBC that will lead to an early abolition of the licence?

Mr. Hurd: I have got into trouble in the past for saying that, as choice multiplies, the rationale behind the BBC licence fee—which is paid whether one does or does not watch the BBC—becomes weak. I believe that that is true; that is why I do not believe that the licence fee should be regarded as immortal. We have set out carefully in the White Paper the steps that we propose to take to nudge the BBC towards looking at subscription, but it is too early to answer my hon. Friend's point. The Peacock report's advice, which we accepted, was against having advertising on the BBC. The White Paper does not reopen that question.

Mr. Hattersley: The Home Secretary has said some 10 or 12 times that the White Paper is explicit and specific in its proposal to avoid concentration. If that is the case, why does the paragraph dealing with that subject conclude, after several sentences of platitudes:
the Government would welcome comments on the scope and formulation of such rules"?
Do the Government know what they intend or not? The Home Secretary should face the fact that, if the argument between us is to be about "choice", he must try to concentrate on what that word means. For viewers to have a real choice there must be real alternatives between which they can choose. Does he not worry to the slightest degree that he will reduce variety by placing so much power in the hands of the producers in the market that he will attempt to create?

Mr. Hurd: On the first point—I think that the right hon. Gentleman is on a false point—we state quite clearly in paragraph 6·48:
clear rules will also be needed which impose limits on concentration of ownership".
In paragraph 6·53, we sketch the ground that those rules will need to cover, which I have already outlined in answer to the hon. Member for Birmingham, Perry Barr (Mr. Rooker). The general principles include newspapers, concentration of ownership within the television industry and the possible concentration among foreign holders of television interests and our own. Those are possible proposals set out to consider the concentration of ownership.
Since we are a democratic and listening Government—[Interruption.]—particularly in this sphere, we have asked for views on precisely how those principles, which are absolutely clear and firm, should be applied. The right hon. Gentleman would have been furious if, almost a year before we introduced legislation, we said that, on this important issue, our minds were entirely closed. The principles are there, they are firm and they meet the points which the right hon. Gentleman has raised. After he has finished his rhetoric, should he favour us with precise ideas on how the principles should be implemented, we shall add them to our own and those expressed by other hon. Members who have raised this issue.
As I told the right hon. Member for Plymouth, Devonport (Dr. Owen), when we come next year, to produce a detailed plan for this House to consider, he is right to say that side by side with the proposals for deregulation must be proposals against a concentration of ownership.

Several Hon. Members: rose—

Mr. Speaker: Order. I am sorry that I have not been able to call all the hon. Members who wished to participate, but as usual, I shall keep a list and give them precedence when this matter comes before the House again.

Mr. Bob Cryer: On a point of order, Mr. Speaker. When the Home Secretary began his statement the White Paper was available in the Vote Office. As you will appreciate, Mr. Speaker, it is extremely difficult within two or three minutes, to examine that document. There is a summary, in the Home Secretary's statement, and as soon as he began that statement, copies were distributed in the Press Gallery. That statement is not available in the Vote Office, but I believe that it should be because it gives a more comprehensive summary of the position rather than having I o go through the entire White Paper. If you, Mr. Speaker, could deprecate the omission of a statement from the Vote Office when a White Paper is placed there, it would help all of us.

Mr. Speaker: It is normal practice for embargoed copies of a ministerial statement to be issued to the press, but they are embargoed until the Secretary of State gets up —[Interruption] I really do not see why the press should have those statements before Members. It is not for me to impose the practice, but I believe that it would be helpful to the House if summaries could be put in the Vote Office with the White Paper.

Orders of the Day — Rate Support Grants Bill

Considered in Committee.

[MR. HAROLD WALKER in the Chair.]

Ordered,
That the Bill be considered in the following order: Clauses 1 and 2, Schedule 1, Clause 3, Schedule 2, Clauses 4 to 7, new Clauses, and new Schedules.—[Mr. Gummer.]

Clause 1

TOTAL EXPENDITURE: 1985–86 to 1988–89

Mr. Jeff Rooker: I beg to move amendment No. 1, in page 1, line 9, at end insert
'except where in relation to any year a local authority has before 7th July 1988 approved its accounts in which case he shall treat total expenditure as equal to the amount approved by the authority'.

The Chairman of Ways and Means (Mr. Harold Walker): With this it will be convenient to discuss the following amendments: No. 19, in page 1, line 9, at the end insert
'except where in relation to any year a local authority has before 7th July 1988 approved its accounts and submitted them to the district auditor in which case he shall treat total expenditure as equal to the amount approved by the authority.'.

No. 4, in schedule 1, page 8, line 44, at end insert
'except where paragraph 3A applies'.

No. 6, in page 8, line 50, after 'the relevant amount', insert
'except where paragraph 3B applies'.

No. 8, in page 8, line 50, after 'the relevant amount' insert
'subject to sub-paragraph (2A) below.'.

No. 9, in page 8, line 50, at end insert—
'(2A) Where a local authority has made a decision before 7th July 1988 which affects its total expenditure in relation to the year and the authority has submitted to the Secretary of State by 31st January 1989 a statement certified by the auditor appointed under Part III of the Local Government Finance Act 1982 that the decision increases or decreases the authority's total expenditure by a certified amount, the relevant amount is (as regards the authority) the amount submitted under sub-paragraph (2) above as adjusted by the certified amount.'.

No. 5, in page 9, line 40, at end insert—
'3A.—(1) This paragraph applies where a local authority has approved its accounts after 6th July 1988 and before 31st October 1988 and where the amount of its total expenditure in relation to the year has been certified by the auditor appointed under Part III of the Local Government Finance Act 1982.
(2) In such a case the relevant amount is the amount certified by the auditor.'.

No. 7, in page 9, line 40, at end insert—
'3B.(1)—This paragraph applies where—

(a) A local authority or a Committee of a local authority has received before 7th July 1988 from the person having responsibility for the administration of its financial affairs a report containing estimates of expenditure in the relation to the year, and
(b) the authority has submitted to the Secretary of State before 31st January 1989 a statement containing an amount of total expenditure consistent with the

estimates and certified by the auditor appointed under Part III of the Local Government Finance Act 1982.

(2) In such a case the relevant amount is the amount certified by the auditor.

3) Where there is more than one report received, the report referred to in sub-paragraph (1)(a) above is the latest to be received before 7th July 1988.'.

Mr. Rooker: This is the largest group of amendments and, in effect, they encompass four separate points although they are all related to the retrospective nature of the Bill and the fact that many local authorities feel extremely hard done by because of the nature of the Government's announcement in July. Certainly I do not intend to repeat the points that I made on Second Reading last week, but obviously I suspect there will be constant reference to those local authorities that will lose considerable sums of money because of the operation of the Bill.
The purpose of amendment No. 1 and the purpose of several other amendments, is to allow information that was known about a local authority's expenditure and which was already in the public domain before 7 July, to be used, even though that information had not been received by the Secretary of State. His closedown date for such information was midnight 6 July.
Amendment No. 1 is certainly the most straightforward of the amendments, which will inevitably contain a great degree of technical detail. It deals specifically with the circumstances of an authority which had approved the accounts for any of the years beginning 1985–86, 1986–87 or 1987–88. Of course I accept that the amendment principally affects the year 1987–88 because, in most cases, the 1985–86 and 1986–87 accounts had been closed before the beginning of this year.
Although accounts may have been closed, it would not normally be a matter that would be immediately reported to the Department of the Environment. I understand that, for the accounts for 1987–88, the normal course of events would have been for the authorities to report the outturn of expenditure on a group of forms, not due for return to the Department of the Environment until 1 August. They would not even have been issued by the Department until 24 June. Of course, 6 July comes virtually in the middle of those two dates.
Authorities that have been prompt in closing their accounts and have managed to reduce expenditure below the level anticipated in their budgets or have produced revised estimates are now denied any advantage they would have received because of the Secretary of State's insistence on using information that was received by him before 7 July. Those authorities feel roughly treated, to put it mildly.
At this stage I shall give one example that has been well documented. The authority does not constitute a large urban area—I tended to concentrate upon such examples on Second Reading. It is helpful that my new example comes from a district in the constituency of a Cabinet member. Obviously that is advantageous because I do not want to be seen to be seeking to make partisan points. This is an example of local government feeling badly treated by central Government. Last week I made it clear that Conservative authorities will lose hundreds of millions of pounds, as will Labour authorities, and that it will be the ratepayers and the poll tax payers who will have to foot the bill.
I hope that the Minister will give us the reason why West Somerset district council has been so roughly treated. I should like to draw the attention of the Committee to correspondence sent from that council to its Member of Parliament, the Secretary of State for Northern Ireland. A few short sentences, giving the relevant dates, show how a well-run, efficient authority, which is not large, has been shortchanged by more than £100,000 as a result of the Bill. The letter was sent to the Secretary of State from the treasurer and is dated 11 July. It makes it clear that as a result of the decision of midnight on 6 July, the council will lose £133,000.
It is worth giving details of some of the dates because that will show how other authorities are affected. The treasurer states:
On 4th March, 1988 I returned RER89 showing the Council's revised estimated 1987–88 'Total Expenditure' for Rates Support Grant of £1,621,000. On 6th May, 1988 the Council's Final Accounts for 1987–88 were completed and the actual 'Total Expenditure' for Rate Support Grant was £1,477,808. The effect of this reduction of £143,000 enabled me to calculate an additional amount of Rate Support Grant of £133,000 at a marginal grant rate of 93p for every £1 of reduced expenditure.
The treasurer made it clear that there had been a reduction from what was originally budgeted. Whereas councils that spend over the figures laid down by the Government have their grant reduced, if councils spend under those figures, they get additional grant that is not even pro rata, in this case, 93p for every £1 of reduced expenditure.
The treasurer continues:
The Council's Statement of Accounts for 1987–88 was completed on 18th May, 1988 and signed by me.
The Council's Finance Sub Committee received a report … on 14th June, 1988 about the Final Accounts-General Rate Fund Net Rate Fund Expenditure 1987–88 which it approved.
The Department of the Environment sent me the Annual Revenue Outturn Returns for 1987–88 including the Rate Support Grant Return on 24th June, 1988 which I received on Tuesday 28th June, 1988. This was four weeks later than in 1987. My Deputy tackled them immediately and completed them on Wednesday, 6th July, 1988. All Returns were posted 2nd class the next day".
That local authority saved ratepayers' money and did not automatically use first-class post. There was no reason to do so.
The letter continues:
the Department stipulates that it requires them back by 1st August, 1988.
Clearly, the Department would have received the returns by 1 August. However, in the meantime, the 6 July decision was made and as a result the council lost £133,000.
I ask the Minister what was slipshod and lethargic about the council's behaviour. What was inefficient about the way in which the council dealt with the forms that it was required to send to the Department, and the way in which the treasurer and his deputy dealt with its committee meetings? What is lethargic, incompetent or inefficient about that? The council lost a considerable sum. I do not know what the percentage is, but it will be a fairly hefty percentage of the council's expenditure.
5.15 pm
The reply from the Secretary of State for the Environment to his Cabinet colleague can be summed up as, "Tough." According to the treasurer, the £133,000 is
a loss equivalent to a 22p rate for ratepayers in West Somerset.

When ratepayers in west Somerset get their rate demands for next year, over 2p in the pound will be a direct result of the council being short-changed through the Government choosing an unfair, arbitrary date and then not wanting to take on board other information that was already in the public domain. That council would not seek to change a single figure in the accounts to which I have referred. No creative accounting is involved. All the information went before the committees and was dealt with in public. The council does not seek to change any of it. All it says is that because it was public information, the Department of the Environment should take it on board and look at the accounts accordingly.
Amendment No. 5 and its paving amendment, No. 4, require the Secretary of State to take into account local authorities' final expenditure figures for 1987–88 in determining their grant entitlement in cases where the authority had approved its accounts and had them certified by its auditor after 6 July but before 31 October 1988. The significance of the latter is that that was the date of the Bill's Second Reading.
Again, the information would be available already. We are addressing ourselves simply to the arbitrary cut-off date of 6 July. The accounts would be certified by an auditor. The amendment would require the Secretary of State to take into account information later than 6 July if it met the relevant criteria. He would have to take into account increases in expenditure that would reduce grant as well as reductions in expenditure that would increase grant, which is the example that I have just given from west Somerset. On past trends, local authorities' final expenditure would be lower in aggregate than the earlier estimates, so there would be a net recoupment of holdback grant. Even so, the Treasury would still gain.
The Minister should consider that seriously. We are looking at the period from 6 July until 31 October, which is not arbitrary, but the date of the Bill's Second Reading. That is another point that should be considered as the Bill goes through its legislative process, although one can hardly call what is happening today a legislative process because the Bill will not receive the scrutiny that it deserves.
For practical purposes, I should like to call amendments Nos. 6 and 7 the Brent amendments because they are about the effect on the London borough of Brent. The amendments would allow the latest expenditure estimates for 1987–88, prepared by the director of finance or the treasurer of an authority before 7 July, to be substituted for the latest figures received by the Department of the Environment.
Let me give the reasons for the amendments. Clearly, local authorities did not know before 7 July of the Secretary of State's intention to use the latest information available to him as the final basis of calculation for the rate support grant in 1987–88 or, indeed, any of the Iwo previous years. That was a secret. The Secretary of State's scheme to come to the House to make his statement would not have worked if it had not been a secret. That was a necessary part of his plan. As a consequence, authorities were unaware of the need to get the latest estimates for expenditure for 1987–88 to the DOE. The authorities could have sent earlier estimates. As a result, the Government were using estimates which were too high and local authorities will lose grant. It is only fair that amendment No. 7 would allow local authorities to replace the DOE's assumption with later estimates.
It is important to note that amendment No. 7 will only allow that substitution if the following five conditions are met. First, it will allow substitution if the later estimates were received from the director of finance or treasurer by the local authority or a committee of the local authority, in other words, if the estimates are a matter of public record. No local authorities hold meetings in secret. If they do, we would like to know about them because that is not supposed to be the case. We are looking for information which is clearly in the public domain.
The second condition is if the later estimates were received by the authority before 7 July—that is, before the date of the Secretary of State's announcement—so there is no question of the estimates being doctored after the statement.
The third condition is that the authority makes known to the DOE by 31 January next that it has later estimates so that there will be no additional work for DOE staff in finding the latest estimates from each authority. We do not want to impose extra work on the hard-pressed civil servants in the DOE.
Fourthly, the district auditor—who is independent—must certify that the total expenditure figure submitted fulfills the requirement of the law in that it is the latest estimate before 7 July 1988 and that the total expenditure figure is consistent with the estimates.
The final condition is that the report to be used as the basis of the substitution should be the latest report prepared for the director of finance or treasurer before the 7 July deadline, so that there is no scope for any authority to choose the most favourable report. Some authorities may have three or four estimates, some higher and some lower than others. We do not want to allow an authority to choose one, knowing the new rules, to maximise its grant. I am referring to the latest estimate that has been prepared and presented to the authority.
If the Minister for Local Government wants to accept any of the amendments or to intervene at any time, I will gladly shut up and sit down and we can then make further progress. I take that for granted in Committee. I am not here to listen to the sound of my own voice or to talk to Ministers if they do not listen to me. I offer that opportunity to the Minister in a spirit of co-operation.
Clearly, the Minister is not about to accept the amendment and I must therefore surmise why the Minister will rubbish it. First, he will say that there is scope for ambiguity about the total expenditure figure and therefore it is not certain. Obviously there is certainty in the Bill at the moment and it will mean extremely rough justice for many local authorities. The Government will argue that local authorities should be free to choose whether they submit a certified statement. If that approach is taken, all authorities should be treated in the same way. The Minister might also say that the amendment will delay the making of a supplementary report for 1987–88 until the new year.
For the benefit of my education, the Opposition's advisers have provided me with replies to those objections which the Minister might use. I will cite this advice now because it will save bother later and reinforce my points about Brent.
We argue that there will be certainty about the appropriate total expenditure figure because of the five

safeguards, or conditions, which I have referred to in some detail. There will be no change if a local authority does not submit a certified statement. Clearly it is up to the authority to do that. If it submits such a statement, the Government will know that it is consistent with the latest estimate to the authority or its committee before 7 July and that it is the latest estimate. The district auditor will be required to certify that that is the case. There is no scope for ambiguity.
Those authorities which submit a statement will only regain grant that they were entitled to before the advent of the Bill. As I said last week, local authorities had every expectation that the £512 million would in due course be available to them and not paid back to the Treasury. We are not talking about new money over and above that which Parliament has already agreed. The amendment will allow authorities to avoid injustice which they would otherwise suffer. That is fair enough.
I have it on the best authority that the delay to a supplementary report is not serious. For 1987–88 the grant entitlement of one authority is not affected by that of others. Therefore, each authority will know what change in grant it can expect to receive. I understand that it is quite common practice for the DOE and the Secretary of State to lay the supplementary reports before Parliament in the period before a new financial year, but only to implement the change once the year begins. That allows local authorities to budget for otherwise unforeseen grant changes. The timetable built into the amendment allows all that to happen.
I want to refer to the figures for one authority which would benefit from the amendment. Most of the figures used by the DOE for the purposes of the Bill for the year 1987–88—which is the year affected for which the accounts will be closed down, it is not the current financial year—come from the form RER89. That form contains budget figures for 1988–89 and the revised estimates for 1987–88.
Brent council had not submitted its RER89 form by 7 July 1988. No one would argue about that. Brent had agreed a total expenditure figure when it set its rate in March, but it was unable to decide how its budget should be split between the different service areas. Therefore it could not fill in all the form. No hon. Member needs to recite the financial difficulties that Brent has faced.
While Brent had agreed its total figure, it could not fill in the detailed form for the particular service areas. As it did not want to send off a partly filled in form, that form was not sent. Officials from the DOE telephoned Brent to find out the total expenditure figure for 1988–89 and asked for that to be confirmed in writing. Brent did not confirm the revised estimate for 1987–88, although the figure was available and provided to DOE officials orally.
Brent did not appreciate the significance of this until after 7 July. Its revised estimate as reported to the council in March showed a £5·9 million reduction in expenditure compared to the figure that the Government are using. Everyone realises that Brent council is making substantial cuts in its expenditure this year. However, as a result of the Bill the difficulties facing the councillors and citizens of Brent will be made even worse. That is because Brent will lose £8 million in grant that it reasonably expected to receive. The figures were calculated by Brent officials and agreed by the councillors. Councillors do not go round willy-nilly cutting services. However, they cut the budget


by £5–9 million and are prepared to take the consequences and to fight their corner. I shall later deal with the detail about that.
5.30 pm
Brent councillors reasonably expected to receive £8 million in extra grant. That is part of what the debate is all about. The Government always tell councils to cut their expenditure below the level that they are planning and they will get more grant, more money pound for pound. The amendment would allow Brent to submit a statement certified by the district auditor saying that its latest estimates of expenditure for 1987–88 are lower than the Department of the Environment had assumed.
How many times have we heard local government Ministers—I exclude the present Minister who has not been long in post attack—Brent for spending too much and call upon it to reduce expenditure? Brent has done that and it is grossly unfair to penalise it to the tune of £8 million. We want the amendment so that Brent will be allowed to submit a statement of the sort that I have outlined. That would certainly remove the unwanted and unwarranted financial pressure on Brent council which is extremely hard pressed and suffering.
I recently read a heavyweight piece in The Independent written by some professor whose name I forget. The piece was about Brent but the writer did not say whether he was a ratepayer or lived there. However, he said that Brent needed financial help. He also made some political points and said that Brent had been badly treated over its finances.
Brent council continues to spend over £300 million a year. The borough spends more on social service day nurses than any other outer London borough. Its rent figure is about the same as the outer London average and, believe it or not, with all its problems Brent's pupil-teacher ratio is still above the national average. That is much to the credit of Brent councillors who have had to agree the latest budget. The level of service in all areas of Brent is still superior to any comparable Tory-controlled authority.
Brent council is prepared to be honest and to face the consequences of the problems that were left to the present administration. No one can point the finger at any single party, because Brent suffered greatly when it was run by a coalition of Liberals and Conservatives. That coalition left a considerable mess and balances of £37 million were cleared out before Labour took control. I must put the positive case for Brent. As long as I am responsible for speaking for the Labour party on local government matters I am not prepared to listen to unfair criticism of any local authority, Labour or Tory. Sometimes there is fair criticism but there has been a great deal of unfair criticism about Brent. In the view of many people, Brent is now bravely seeking to put its finances in order. It is grossly unfair that this legislation will result in Brent losing £8 million of Government grant.

Mr. Graham Allen: Would my hon. Friend like to comment on the change of control of councils? He may be aware that a by-election last Thursday in Nottingham turned out the sitting Tory council, not least because of its mismanagement of Bradford and the Government's unpopularity in Nottingham. Would he like to say something about the change of control now that Nottingham has a Labour-controlled authority?

Mr. Rooker: My hon. Friend is right. In a debate in the House last week Nottingham figured almost as much as Bradford. A Conservative Member who is not present at the moment said that he knew Nottingham better than my hon. Friend the Member for Nottingham, North (Mr. Allen). I understand that a Conservative majority of 400 was turned into a Labour majority of 600. The Labour candidate, now Councillor Clark to whom we send our congratulations, polled over 2,000 votes. The Democratic party candidate polled more votes than there are amendments on today's order paper from that party. He polled 89. It is to the credit of the people of Nottingham that they listened to our debate on Monday and took on board the arguments that we advanced about the Bill and its unfair treatment of the people there. They voted accordingly. I understand that today that decision will be translated into practical effect in the council chamber.

The Minister for Local Government (Mr. John Selwyn Gummer): Would the hon. Gentleman like to comment on the by-election that took place in Hyndburn, one of the most marginal seats? In that by-election the Labour candidate was booted out by the Conservative candidate and the community charge was an important issue in the by-election. Would the hon. Gentleman speak in the same way about the people of Hyndburn, or are they backward compared to the people of Nottingham?

The Second Deputy Chairman of Ways and Means (Miss Betty Boothroyd): Order. I think that both sides of the Committee have had their say on this issue. Perhaps we could get back to the amendment.

Mr. Rooker: The difference is that everybody knew, because it had been made clear in the House during our debate last week, that the elections in that one ward were crucial to the control of the council. That adds greater weight to the point made by my hon. Friend the Member for Nottingham, North.

Mr. Irvine Patnick: I understand that the casting vote is now in the hands of a Communist.

Mr. Rooker: Yes. He holds the distinguished flying cross, an honour he won in the battle of Britain. We live in a democracy and he was elected as a councillor. I do not see anything wrong in that. Does the hon. Gentleman see something wrong in it?

Mr. Patnick: I see no difference between that and the casting vote of the mayor of Bradford.

Mr. Rooker: At the moment, the mayor of Bradford is using two votes. I understand that each councillor in Nottingham uses one vote.
I should like to come to my final point on amendments Nos. 8 and 9. I am looking round to see if I can locate one of my hon. Friends but he does not appear to be here at the moment. Perhaps he will arrive before we conclude the debate. The revaluation of superannuation funds was raised on Second Reading and the Minister said that he would look at the matter. I do not know whether he will have anything to say about that in this debate. Amendments Nos. 8 and 9 cover police authorities, passenger transport authorities and, of course, local councils. We have some other matters to raise about superannuation funds and their effect.
I understand that some local authorities are in the process of taking decisions in good faith which affect the


expenditure of block grant entitlement. I shall stick to one narrow point. Some authorities, which have undertaken interim revaluations on the superannuation funds, have taken account of reduced employers' contributions in the revised estimates. Other authorities decided not to take them into account until the position was clearer, but will have done so when closing their accounts. In the normal course of events those councils would probably not have closed their accounts for about another year.
The retrospective nature of the Secretary of State's statement of 6 July is causing difficulty. Amendments Nos. 8 and 9 rescue at least those decisions that were made prior to the Secretary of State's announcement. That is all that we are talking about here. Being dependent on the external auditors' certificate, the figures could not be open to manipulation by any of the authorities, and no authority is seeking to do that. The Government have to meet this point. I know that many of my hon. Friends who represent constituencies in the west midlands have received representations on this matter.
One of the difficulties that we are under is the nature of the Bill and the way that it is being rushed through all its stages. On a later amendment I have a point to make about a major authority which was unaware, for whatever reasons, of the effect of the Bill upon its operations until something like Thursday of last week. That is difficult to imagine, but nonetheless, that is the case, and millions of pounds are involved. I should like the Minister to look at amendments Nos. 8 and 9 in the context of those authorities where revaluations of superannuation funds have taken place. I know that in some cases there were objections from the Government earlier on. Any proposals will have losers and gainers, but there seem to be more losers than gainers in this proposal. Authorities tend to underspend against the estimates.

Mr. Gummer: I hope to help the hon. Gentleman. With the superannuation, there is a problem. Authorities could not have written back after this date a sum that would help them because a revaluation between the dates has been seen to be contrary to the law. Therefore, the amendments that he is proposing would not help authoritites in those circumstances. This was the point I was trying to discuss earlier. I agree that this is a complicated matter, but that point would not be met by these two amendments, although the hon. Gentleman is right to say that others might be.

Mr. Rooker: I take the Minister's point.
The seven west midlands district councils stand to lose some £25 million over three years if the Secretary of State fails to take account of the impact of revaluation. If the west midlands authorities are revaluing their pension funds contrary to law, then someone will have to point that out to them. They are unaware that the revaluation was contrary to the law.

Mr. Alun Michael: I almost feel sorry for Ministers who are left to defend what they must know to be completely indefensible. If they have understood the facts and the arguments, they must surely know that the Bill contains matters that constitute a public scandal. If they were to walk out now and tell Cabinet

Ministers to do their own dirty work, they would have the greatest sympathy and understanding from Labour Members.
The smokescreen for the Bill is that it will merely stop creative accounting or prevent unscrupulous councils getting around rules. That is irrelevant to the objections I have to it, because of the effect that it will have on my constituents as ratepayers of Cardiff city council and South Glamorgan county council. It is also irrelevant to the point of principle involved. Amendment No. 19, which I have tabled, is so tightly drawn as to make it impossible for any local authority that was the target of the Government's wrath to have the slightest chance of "getting away with it". The Secretary of State for Wales made a statement about the effects that the Bill will have on Welsh local authorities. When he and the Secretary of State for the Environment made their statements on 7 July, they must have known that they were not only breaking past promises, but acting illegally, and the Bill seeks simply to legitimise that illegitimate behaviour. That cannot be put too strongly.
Three quotations show how serious this is. The first comes from G. C. Thornton writing in "Legislative Drafting", the authoritative text book on this matter:
Retrospective laws offend against the general principle that legislation intended to regulate human conduct ought to deal with future acts and ought not to change the character of past transactions carried on upon the faith of the then existing law.
The Bill flies in the face of that principle.
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Lord Pearce, in a judgment in the other place in 1971, said:
the presumption against retrospection is not a technicality. It is a general rule of justice not dependent on forms of words. It is founded on a judicial preference, where choice is possible, for the reading which does not invalidate existing rights and obligations.
The Bill flies in the face of that principle.
The third and most telling quotation comes in the words of Professor Goodhart in the Law Quarterly Review of July 1950, who refers to principles that "few people would dispute":
The first is that the law should, as far as is reasonably possible, be certain and stable, and the second is that it ought to be general in character and not be altered in regard to particular individuals. Certainty is necessary so that men can have reasonable confidence that their plans for the future will no be subject to sudden unpredictable changes. If established rights are altered retrospectively then life becomes a double gamble because now both the past and the future become uncertain.
I should like Tory Members to mark the final part of this quotation:
No commercial community could hope to survive if such an element of chance were introduced into normal life.
Ministers are expecting local authorities to live with such uncertainties. The point is simple and basic—this Bill fails on both the counts set out in that quotation.
The Under-Secretary of State for the Environment, who replied to the debate last week, relied on being able to say that the local authority, in this case Cardiff, had plenty of time to get these figures in before 7 July. As I am sure that the Minister did not intend to mislead the House deliberately last week, I hope that she is now aware that what she said was inaccurate, and that she will take the opportunity today to put the record straight. I will set out the position simply and clearly, and ask the Minister or her colleague in the Welsh Office, who must be well aware that


what she said last week was inaccurate, to confirm that what I say now is the truth, the whole truth and nothing but the truth.
I am referring specifically to Cardiff city council, and some of the details are similar to the cases quoted by my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker), although in our case, it is the Secretary of State for Wales and the Welsh Office who have to take responsibility and must account for the decisions. This is a cast-iron case. The city council provides the Welsh Office with details of its projected, estimated and actual expenditure on forms dispatched by the Welsh Office. In February 1988, form RER89 and a covering letter were received for completion. The form was to be returned by 25 March 1988. Paragraph 7 of the covering Welsh Office letter emphasises that the details need be only
The best estimates that can be made in the time available, as an informed approximation".
It goes on to say that the refined figures should be provided at a later stage.
When the form was being completed, the financial year to which it related had not ended; nor were final figures then available for all items of income and expenditure for the year. The hon. Member for Cardiff, North (Mr. Jones), who, like me, has served on Cardiff city council finance committee, will confirm that accounts are closed only after all relevant information has become available. In the event, the completed form RER89 was an estimate of expenditure for the year based on budget figures and incomplete data based on such figures as were available—the normal and proper way to deal with such cases.
On 16 June 1988, the final accounts for 1987–88 were laid before the finance committee of the city council and approved. These showed that, whereas the city council's expenditure had been estimated in 1987–88 to be £23,694,500, actual council expenditure had been reduced to £22,396,876. That was the result of measures adopted by the city council to achieve savings in accordance with central Government guidelines and policy, and made on the basis of published grant figures and of statements made to the House by the Secretary of State for Wales. The result was that expenditure has been reduced by £1,297,624 from the budget figure. In accordance with the information then available, additional grants of almost £2,300,000 therefore became payable.
I want the Minister to take note of the date that I am about to give. On 29 June 1988, just one week before the statement by the Secretary of State for Wales—when the intention must have been known to Ministers and officials at the Welsh Office—the authority received form RO 1987–1988 and a covering letter. With the form was another form headed "Block Grant Claim Form 1987–1988". It was stated that that was the final block grant claim form and required certification by the chief financial officer and auditor. The earlier form had not required such audit certification or signatures. The covering letter stated that the form was to be returned by 31 July 1988.
In the past, Cardiff city council has always completed the RO form on the basis of actual expenditure—which has formed the basis of the audited accounts. The Welsh Office has always calculated the grant payable on the basis of the form and the actual expenditure of the city council.
There was no consultation or advance notification prior to the statement of 7 July. There was no suggestion that the form should be returned earlier than the specified date

—that is, 31 July 1988. There was no warning that the basis on which the block grant was calculated would be changed from actual to estimated expenditure. The arbitrary and fundamental alteration of the basis for payment of the council's grant caused initial disbelief and then upset and dismay among everyone concerned with local government finances.
During the financial year, many hard decisions had been taken to ensure that the council did not exceed its budget figures. The expectation and understanding, based on the law and on the Government's announcement, was that by achieving economies the council would be entitled to an increased grant. Now, for no good reason related to the council's behaviour, and without prior notice, the Government seek to change the position after the event and deny the council those moneys. The council was misled in circumstances that were unreasonable, unfair and damaging to the integrity of proper public administration. Do the Government intend to cause such
Since 7 July, there have been efforts to put matters right. Civil servants were clearly embarrassed. The local authority believed that, when Ministers realised the impropriety of their decision, matters would be put right. I believe that hon. Members of all parties thought that Ministers would draw back from their decision.
I shall summarise the scandal in words of one syllable—I realise that the word "scandal" has two syllables, but I hope that most of the other words that I use will have one. One must bear in mind the assurance that was given in the House by the Secretary of State for Wales and by the Secretary of State for the Environment that actual expenditure—not estimated expenditure—would count in the calculation of the eventual RSG payment made to the local authority. One must also bear in mind that Cardiff city council had observed every requirement made by the Secretary of State, had kept within the targets set by the Secretary of State, had provided all the information that was required by the Secretary of State and had been reassured only days before 7 July that it had until the end of July to submit the form giving details of actual expenditure.
In the light of that rectitude, will Ministers seriously press ahead with these provisions? They should also bear in mind that Cardiff city council had gone further and had succeeded in keeping its expenditure below the target set by the Secretary of State, secure in his assurance that it would thus attract the additional £2·3 million grant to which I referred earlier. The council had gone far beyond the minimum certainty that the Secretary of State might have expected.
The council closed its account by 7 July. The accounts were approved by the finance committee and the full council by the end of June. The accounts had also been sent to the district auditor before 7 July—he can attest to that quite easily. The information was also sent to the Under-Secretary of State for Wales, in his capacity as one of the local Members of Parliament. That information had reached all local Members by that date—well before the date requested by the Welsh Office. Finally, the accounts were provided to the Welsh Office by the date requested on the form.
There is no doubt about the figures on which the Government ought to base their decision about the grant to Cardiff city council. The figures were in print and in the public domain before the Secretary of State's announcement on 7 July. They were with the district auditor, who


can verify that fact. The figures had reached the local Members of Parliament, including the Under-Secretary of State for Wales, who is not only the Minister responsible but represents Cardiff, Central and whose constituents, as ratepayers, will be affected by the Government's appalling behaviour in this regard.
There is not only no creative accounting, there is no scope or possibility of creative accounting. There is no way in which those figures could have been tampered with after the statement given by the Secretary of State. Cardiff and South Glamorgan have such cast-iron cases that it will be a public scandal if the Minister does not accept my submissions. I call on the Minister and on the Under-Secretary of State for Wales to respond by accepting either my amendment or the slightly wider one tabled by my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker). I call on them to put matters straight, to put them back into the area of public rectitude and to avoid what will otherwise be a public scandal.

Mr. Malcolm Thornton: The hon. Member for Cardiff, South and Penarth (Mr. Michael) has raised what he called a fairly narrow point. My point could be described as even narrower as it is very much a technical matter.
The Merseyside residuary body has made representations to me that there is an expenditure figure in the 1985–86 RSG fourth supplementary report consultation paper which is not correct for rate support grant purposes in respect of Merseyside county council, which, as we know, is now defunct. If my right hon. Friend the Minister for Local Government can give me an assurance, I need not detain the House any longer. Can he assure me that, notwithstanding the proposed specified date of 6 July 1988, the residuary body will be given the opportunity to present the revised grant-eligible expenditure figure of £203–219 million in lieu of £204–186 million which the district auditor now suggests is not appropriate for grant purposes? Perhaps my right hon. Friend can state whether that assurance can be given.

Mr. Gummer: I must advise my hon. Friend that when I deal with the matter in rather more detail he will see that I will not be able to give the assurance that he seeks.

Mr. Thornton: In that case, perhaps I can give some further background information which might assist the Minister in the time between now and when he replies to the debate. I shall be brief, because these are technical matters but perhaps I can give the basic facts.
The accounting year in question is 1985–86, the final year of the former Merseyside county council. Because it was the final year, it was both prudent and necessary to bring in prior year adjustments amounting to £967,000 to reflect the county's closing position. It has been accepted by the Department of the Environment and confirmed by a letter dated 14 February 1985 that prior year adjustments should not have implications on the amount of rate support grant entitlement. In completing form RS1B, which is the block grant claim form, the district auditor made amendments which effectively included an inappropriate figure as a result of prior year adjustments for total expenditure for the year, which would involve the Merseyside residuary body in the loss of £1·4 million grant for the year.
The district auditor has now confirmed in a letter dated 28 October 1988 that the effect of the submitted RS1B is not in line with the DOE letter of 14 February and has suggested that the total expenditure figure should be reconsidered.
Further, on 26 August 1988, a Department of the Environment letter inviting views by 21 September 1988 on the proposed rules included an exemplification of the figures of total expenditure which will be used to calculate the block grant. That was the first occasion on which the Merseyside residuary body became aware that
an incorrect figure was in the possession of the Department of the Environment.
The letter was delayed beyond the response date by the postal strike, but, on receipt, an immediate response was made.
The facts concerning this narrow, technical point should persuade the Minister at least to allow the Merseyside residuary body the opportunity to present the amended figures. The figures were amended not by the former county council, nor by the residuary body, but on the advice of the district auditor, despite his original advice to include the figures in the submission. I should have thought that that in no way runs counter to the general thrust of the Bill and is a point well worth consideration.

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Mr. Matthew Taylor: The hon. Member for Cardiff, South and Penarth (Mr. Michael) said that he would sum up the issue in words of one syllable. I wondered how he would manage that and he proved conclusively that we cannot sum up this issue in words of one syllable.
The Government are aiming in the Bill to prevent the continuation or deterioration of the lottery of rate support grant. The amendments—I have tabled amendments with a similar intention—would allow us to get away from one of the most unjust and harsh lotteries that the Government have introduced by their random choice of a cut-off deadline for those authorities affected.
The Association of County Councils has heard from 37 counties on the impact of the announcement. Most of the detailed information and complaints relate to 1987–88. The replies show a general underspend on revised estimates, meaning that the expenditure rules have led to a loss of grant. The estimated losses range from the very small right up to the figure of £9·7 million, which is far from being a small figure. Only three counties closed at 6 July figures. In addition to underspending, some authorities lost expected grant as their plans to reduce outturn through the use of balances were rendered irrelevant.
Four counties showed that the rules resulted in grant gains for them, largely owing to overspends on revised estimates. However, without the announcement, two of those counties would have sought means of reducing that overspend, so the Government's intentions have not been fulfilled. The largest gain by far is £8 million to one county, due to new accounting practices in preparation for the community charge. That is not just a lottery; it is like playing bingo. It does not require any serious thought or planning; the Minister merely requires the same skill as the bingo caller.
In addition, a number of specific points were made to the ACC. The part of the 7 July announcement to which authorities most object has consistently been the


application of the rules to 1987–88. The Minister, in trying to defend what he has done, is most vulnerable on that point and should show the greatest flexibilty in responding to the points that have been made.
The 6 July deadline is quite simply unfair. There are many reasons for that, but I shall highlight just a couple. The 6 July date is close, but just prior, to the closedown date for many authorities. The Department of the Environment's deadline for outturn figures was 1 August. Therefore, even those authorities which had effectively closed down their accounts had no incentive to submit those final figures to the Department before 6 July. That can he seen in all authorities. West Somerset, the case quoted at great length by the hon. Member for Birmingham, Perry Barr (Mr. Rooker), is just one example of the many authorities that have been caught out in this way. The underspends in 1987–88 are, to a great extent, genuine and not the product of any form of creative accounting. As the Minister must be well aware, many of them affect authorities wholly or partly controlled by the Conservative party.
I shall he brief, as these points have already been made very eloquently. The solution to the problems lies in the Minister's hands. He can deal with them effectively, through the amendments before us, through alternative amendments tabled by other hon. Members, including myself, or in ways that he and his civil servants can no doubt think up; but, at present, he shows no intention of recognising the unfairness and injustice of what he is doing. He would rather see a saving to the Treasury and have his civil servants given a little bureaucratic ease in their dealings than respond to the genuine needs and pressures of the authorities affected, whether they be Brent or councils controlled by the Democrats or the Conservatives. The effect of this lottery in the Bill is unfair. He can correct it, and I hope that he will tell us now that he will do so.

Mr. Gwilym Jones: I find myself in general agreement with the concern for the consequences of the case in Cardiff, mentioned by the hon. Member for Cardiff, South and Penarth (Mr. Michael), although he used far more extreme language than I want to use. We have a good case in Cardiff and I hope that it will not be affected by such extremist positions.
I do not much care for amendment No. 1. I find amendment No. 19 far more preferable, but both amendments are superior to the position in the Bill. I accept that he who sets the rules is entitled to change them whenever necessary. However the rules are changed—either through parliamentary legislation or through the Secretary of State acting under the proper authority of regulations—some form of consistency is desirable. When my right hon. Friend the Secretary of State described the outcome of the rate support grant settlement in March 1987, he said:
Ultimately the grant paid to a local authority in respect of the year will depend on what that authority actually spends.
He went on to say:
I intend that the settlement for 1987/88 should give the further certainty of ensuring that each authority's grant entitlement will depend solely on its own spending decisions and not be affected by decisions taken by other authorities.
Many, if not all, of us should subscribe to that latter statement. Authorities should have the certainty of

knowing that the outcome will be determined by their own spending decisions and will not be affected by the decisions of other authorities.
I am moved by the Cardiff case. That is not an example of creative accountancy. The books for Cardiff were closed well in advance of the key date, introduced this year, of 6 July 1978, but Cardiff will now receive a figure slightly different from that quoted by the hon. Member for Cardiff, South and Penarth. The council's director of administrative and legal services advises me that Cardiff stands to lose £2,127,000. However, whether we take the figure quoted by the hon. Gentleman or that quoted by the city council, it is no small sum for any district council and certainly not for the capital city of Wales.
Cardiff comes to be in that position because of an estimate form requested by the Welsh Office to be submitted by 25 March. That was not the formal return, giving accurate final figures, which was requested later, but an estimate that was requested before the end of the financial year. That was clearly an estimate and could only have been an estimate. Indeed, the covering letter asking for the form to be returned by 25 March advised councils to opt for speed rather than accuracy if a choice had to be made.
What opportunity does such an estimate give for creative accounting? There is no requirement to give hard figures. The authority can put down any figures that it chooses and even manipulate its own case depending on its view of the situation. As it is only an estimate, it can entail no responsibility on the part of the council. Certainly, it cannot be a proper basis to enshrine in legislation for the determination of grant for 1987–88. I have the greatest apprehension that this legislation cannot be the end of the matter, that there must be a distinct possibility of legal action and that we may find ourselves attempting to legislate again in the light of a court decision.
I very much doubt whether I shall be able to support the Government on this. I will listen closely to the debate, but I feel strongly about the way in which Cardiff is treated by the proposed legislation. As the hon. Member for Cardiff, South and Penarth pointed out, the accounts were closed before the new final date. The figures were properly submitted to my hon. Friend the Minister with responsibility for local government in Wales and I seek the important assurance today that those accounts, rather than any estimates, will be accepted as the final and crucial figures.

Mr. Ian McCartney: I apologise to the Minister and to my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) for missing their initial comments on the amendments as I was at a meeting to discuss Lords amendments to the Housing Bill, which will come before the House later this week. As a former member of Wigan metropolitan borough council, I served on both the finance committee and the policy and resources committee. Later I was also a member of the Greater Manchester fire and civil defence authority which I represent in the House on an honorary basis.
On Second Reading, I listened with growing incredulity to the Minister's responses and to the excuses given for the promotion of this legislation. When I returned to my constituency at the weekend, my incredulity turned to anger as a result of a meeting with elected members of the authority and its financial officer to determine the effects of the Government's proposals both on Wigan metropolitan


council and on the Greater Manchester fire and civil defence authority. Wigan metropolitan borough council stands to lose £1·29 million in grant entitlement—a loss of a further £600,000 on the calculations given to it following discussions with the Department of the Environment after the Government's announcement of 7 July. Wigan council is particularly disappointed because many of the measures suggested for the reduction of expenditure last year and this year were not merely identified but actually met. Reductions were shown under many heads—housing, social services, leisure and education—but despite that, the Minister's statement will mean a major loss in terms in grant entitlement.
In reviewing this and next year's budgets, the authority did not act only in a political way. Joint meetings were held between the policy and resources committee and the management team to identify heads of expenditure under which improvements could be made without disrupting the level of services provided so as to meet the Government's requirements. That was done to the satisfaction not just of the local authority but of the Secretary of State. Indeed, the Under-Secretary of State has many times cited Wigan council at Question Time as an example of value for money in services, especially in relation to housing.
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Earlier this year, the Under-Secretary of State, the hon. Member for Southampton, Itchen (Mr. Chope), met a deputation from the authority led by myself and my hon. Friends the Members for Wigan (Mr. Stott) and for Leigh (Mr. Cunliffe). At that meeting, we identified a miscalculation by the Government of about £1 million in the authority's grant last year. It was also agreed that, to determine whether the grant provided was fair, officers from the Department should sit down with officers from the authority to consider the budget for the current financial year. Despite all that close scrutiny and involvement by the Department, no indication was given between the 7 July announcement and the 31 October statement that the authority would face such a major reduction in grant entitlement. The Minister cannot have it both ways. He cannot suggest that the aim of the Bill is to deal with the wide boys in local authorities when councils such as Wigan have sat down with officers from the Department to consider value for money in services provided but still face substantial losses in this and future years.
The authority has a difficult task ahead in trying to balance its budget. I hope that the Minister will tell me and my hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael) what advice he has for local authorities which have consistently followed statements made in the House and advice given by civil servants as well as advice given to regional authorities in discussions about both capital and revenue programmes but still find themselves with a major shortfall because the Government have decided to change the rules, not just part way through the year but almost at the end of the year. The Minister owes it to the ratepayers of Wigan, Cardiff and other authorities to make the position clear in relation to the level of services provided and the nature of the expenditure identified by those authorities as necessary for the continuation of those services without major disruption.
This measure has also greatly affected my authority's ability to deal with the capital cost this year and next year of introducing the poll tax arrangements. The Government's decision has merely rubbed salt in the wound, further reducing the grant available without reducing by a penny the imposed cost of introducing poll tax. Having considered the Government's proposals with officers from the Department, the authority identified its needs in terms of both capital and revenue in 1989 and 1990 for the introduction of poll tax. The Government have committed my authority to substantial capital allocations with revenue consequences.
As a result of the present proposals, the authority will have to rearrange its budget not just to meet current levels of services but in such a way as not to dislocate the intoduction of poll tax in terms of capital outlay, facilities provided and estimated revenue costs. Will the Minister assure the House that revenue implications for local authorities' capital expenditure—not capital allocations—will be included both in this year's estimates and in the rate support grant estimates for 1990–91? Without such an assurance, local authorities such as mine will face a shortfall of more than £1 million.
During the Second Reading debate last week, my hon. Friend the Member for Perry Barr highlighted the effects of the Bill on police authorities. However, there was little discussion of the fire and civil defence authorities in metropolitan areas. Like the police, they have been rate-capped, yet they are responsible for the services they provide to both the Department of the Environment and the Home Office. There is little manoeuvrability in either the budget or the level of services. The Home Office and the inspectorate set down the number of stations, the manning levels, the training levels, the purchase of equipment and what campaigns can be undertaken. All that is, quite rightly, tightly regulated because of the work done by the fire services. Whether in Greater Manchester, Cornwall, Essex, Sussex or Scotland—which I have occasionally visited—the fire services are professional and have minimum standards.
Despite assurances about the level of services given to the Home Office for this year and next, the calculated loss of grant for the Greater Manchester fire authority is £1·9 million. Before the Minister's arrangements of 7 July and his statement of 31 August, that authority expected to receive an additional £900,000 in block grant because of the steps taken to reduce its administrative costs and the level of precept levied. At the same time, the authority has maintained the level of services within the professional standards set by the Home Office. The Government's decision means a major loss of grant to that authority, and I understand that the same applies to Merseyside, west Yorkshire and South Yorkshire.
In view of the financial loss to the nation in major fires, it makes no economic sense to make large cuts in fire authority budgets simply because of the Government's accounting procedure. There will be no reduction in the number of fires or the hours that the men need to work. However, because of the loss of grant, the services will have to be provided on an increasingly reduced income base. One major fire in an industrial establishment in Greater Manchester, Merseyside or South Yorkshire can cost the nation £3 million, £4 million or £5 million. Surely even the Government understand the necessity for a


professional fire service that is cost-effective in the real sense—not in the balance sheet at the Department of the Environment.

Mr. Patnick: On 31 October the hon. Member for Birmingham, Perry Barr (Mr. Rooker) said that South Yorkshire would lose £750,000. I wish to quote The Star—and, as I have said before, if something does not appear in The Star, it has not yet happened. On 3 November it stated:
The average family in South Yorkshire pays just 61p a week for their police and fire services. For 38p, they get 2,912 uniformed police officers, backed up with 507 vehicles, while the 23p a week for the fire service gives them 1,077 full-time and 132 part-time firemen, 77 fire engines and other assorted rescue vehicles and tenders.
There does not appear to be any shortage of cash or
manpower in South Yorkshire.

Mr. McCartney: That is because of the commitment given by the elected representatives of both South Yorkshire and Greater Manchester fire authorities which, despite the Government's rate-capping, through brilliant management and administration have maintained the level of fire services set down by HMI and the Home Office. I remind the hon. Gentleman that those services were under threat last year. A joint delegation from the fire and civil defence authorities, involving Conservative, Labour and Liberal Members and local authority representatives, came to see the Minister to sort out the discrepancy between the rate support grant arrangements made by the Department of the Environment and the maximum expenditure limits set by the Home Office, which were not compatible. The fire and civil defence authorities quite rightly took safety and professional standards to be the key words and worked to the maximum expenditure limits set by the Home Office and not the RSG limits set by the Department of the Environment. Had they not done so, there would have been major reductions in the number of fire fighters and in the level of services provided.
I remind the hon. Member for Sheffield, Hallam (Mr. Patnick) that both this year and last year the fire services in London have operated without a single penny of grant from the Department of the Environment. It is the only major capital city in the world whose fire service is being funded out of the pockets of its residents. I hope that Londoners will remember that at the appropriate time.
It is not just the Opposition who feel that these proposals are unsatisfactory. I wish to read a short extract from the most recent report of the Greater Manchester fire and civil defence authority's financial adviser. It is not a political appointment; he works on behalf of the precept payers to ensure that the authority remains within its capital and revenue budgets. He also advises the authority on the relationship between the Department of the Environment and the Home Office in the calculation of grant. That independent, non-political officer reported:
If the Block Grant rules had not been changed then this Authority would have received some additional £0·900 million in Block Grant. It has been demonstrated to the Home Office, through the A.M.A., that the high rate of marginal grant loss has been considerably disadvantageous to this Authority and its Precept payers. In effect the 'goalposts' have been moved once more and the benefits of good housekeeping have been diminished. Additionally, there seems to be nothing now that the Authority can do to improve its 1988/89 entitlement.
Since that report, the Minister's announcement has meant not only the loss of that grant but a calculation that

leaves the authority £1·9 million short. Surely it was not the Government's intention to introduce legislation that would financially cripple such an important service, especially as the level of services provided by each authority is set down in co-operation with the Home Office and HMI. The Greater Manchester fire authority did not take a political decision, and neither did West Yorkshire or South Yorkshire. It was an agreement set down under HMI standards.
I have served in Committee with the Minister, whom I found to be a reasonable man. He had the reputation of someone who went to the Ministry of Agriculture, Fisheries and Food not so much as a green politician but as someone who was to do the Prime Ministers bidding. His period in the Ministry of Agriculture, Fisheries and Food caused him to change his mind. He became greener the longer he served in the House.
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I hoped that the same would apply to this legislation. I am not sure whether the Minister wanted the job, but he was certainly given it following the previous Minister's mauling over the Housing Bill. I hoped that he would learn as quickly in his present job as he had to do at the Ministry of Agriculture, Fisheries and Food. Metropolitan or non-metropolitan authorities and fire authorities, whose budgets are already determined by the Home Office, try to provide value for money on a 12–month budget and, at the same time, look ahead to the next year. They consider the number and level of services provided and the way in which they are delivered. It makes no economic or social sense, part of the way through the year, despite negotiations with his Ministry, as the professional report indicates, for the Minister to move the goalposts. That is done to the detriment of rate and precept payers, without a single penny being added to the level or nature of services.
I hope that, even at this late stage, the Minister will see some sense and support the amendment, and stop the madness of continually treating local government as though it were a political football. People in the provinces are desperately trying to provide a level of service to maintain simple, decent standards of education, housing or fire facilities. They constantly bear a yoke imposed by the Minister and his predecessors. The Government are continually changing the rules and pinching substantial sums of money from ratepayers' pockets. At the end of the financial year, when local authorities set their next precepts, the Government blame local authorities for increases in rates and precepts. In the past six years we could have had reductions in precepts while maintaining services if the Government had maintained the level of grant that previous Governments provided.
As we have seen throughout the country, there has not only been a deliberate attempt by the Government to try to cripple the finances of local authorities but a devious attempt to blame local authorities for a deduction in services and opportunities that they provide for ratepayers. It is time for the Minister to come clean, get rid of this simple little Bill, and accept the amendment. If he does not accept the amendment, through no fault of their own, local authorities will be in financial chaos. By acting on the misinformation that was deliberately released during the summer by the Secretary of State and by civil servants in the Department of the Environment, this


autumn, local authorities may find themselves with substantial reductions in grants that will directly affect the services that they provide to ratepayers.

Mr. Michael Lord: I shall not speak for too long, because, although the relevant amounts of money vary, most hon. Members will speak about much the same issue. My right hon. Friend the Minister of State also represents a Suffolk constituency, so he will know about the things that I shall speak about concerning Suffolk county council. I have already quizzed him on some matters. I shall speak briefly about the Severn-Trent water authority v. Cakebread case. It is not strictly relevant to the debate, but it will have a major impact on the finances of Suffolk county council over the year ahead.

Mr. Gummer: As an amendment relating to Cakebread is to be discussed, perhaps it would be better for my hon. Friend to deal with it then.

Mr. Lord: I was about to say a few words about choosing the date of 7 July. I shall refer to the Cakebread issue at the appropriate time.
As we know, the date of 7 July was chosen in an arbitrary way. I am not quite clear why that date was chosen or why local authorities were given such a short time in which to respond. For Suffolk county council, the cost will be £2·5 million. For a county council that is fairly prudent in its financial dealings, that penalty is rather harsh.
I want to talk about Cakebread because I wish to draw the Committee's attention to the effect of retrospective legislation when it could be helpful and when it could be harmful to Suffolk county council.
For Suffolk county council, the total amount involved in the two issues—the Cakebread point which involves £1·9 million and the £2·5 million involved in choosing the date of 7 July—is £4·4 million. That will have a serious effect on the ratepayers. I know that my right hon. Friend is fair in such matters. Does he consider that this measure is fair and honest? Even at this late stage, will he give the matter further consideration?

Mr. Paul Boateng: I join my hon. Friend the Member for Makerfield (Mr. McCartney) in apologising to the Minister of State and to my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) for having missed their speeches. I particularly regret missing the contribution of my hon. Friend the Member for Perry Barr, with its stout defence of my local authority, Brent, which will be much appreciated.
I hope that, when the Minister replies, he will not be tempted to regard hon. Members' contributions as yet another basket of special pleadings. The matter involves much more than that. It goes to the heart of a provision in a Bill that is fundamentally unjust in its impact on local authorities and their budget-making processes. The Bill does not take into account the real difficulties that many local authorities of all political persuations are experiencing, not only in balancing their books, but in maintaining an adequate standard of service right across the board for local ratepayers and residents.
Therefore, the Bill should not be seen by the Minister in a narrow party way—as a way, yet again, of screwing local authorities. He should recognise it for what it is. I make a

heartfelt plea to him to think again about the impact of the Bill on the hard-pressed ratepayers about whom the Government purport to be concerned. Hard-pressed ratepayers and residents will have to pay the price of the Bill if the amendment is not carried.
Sometimes there is a tendency to suggest that my local authority is faced with a problem that is entirely of our own making, and that the current crisis in the provision of services—a crisis that all too often hits those who are least able to defend and take care of themselves, those who are unemployed, those who are disabled, those who are elderly, those who, for one reason or another, are particularly dependent on local authority provision, just as much as it hits those who simply require the ordinary services such as refuse collection and the like that a local authority should provide for its residents—is entirely of the making of the Labour administration. That is simply not the case. When we ask the Minister to think again, it is against a backcloth of responsibility arising from decisions made by Conservative-Liberal administrations as well as by Labour administrations.
The problems faced by the current administration in my borough, like so many problems faced in our country today, can be traced back to 1979 when the present Government were elected. Since that time rate support grant in Brent has been reduced from some 65 per cent. of net borough requirements to 38 per cent. If the Government had continued to fund Brent at 1979 levels, the council would be receiving an additional £52 million in the current financial year.
The picture has been made that much more dire by decisions that cannot be attributed to the present Labour administration. The problem today would have been more manageable, although there would still have been a problem, had it not been for the irresponsible behaviour of the Tory-Liberal administration between 1983 and 1986. We then saw some £39 million of accumulated balances squandered to depress the rates artificially, particularly in election year. Massive problems were built up for the future. We have become accustomed in the House to seeing the national family silver squandered unacceptably, but in Brent we became accustomed to seeing the municipal silver disposed of in the same way, by the Conservative party.
I want to give the figures, because what we are discussing can ultimately be broken down into figures. In 1986—which just happened to be an election year—the Conservative administration constructed a budget that assumed rate support grant of some £45,320,300, more than £7 million of it from the GLC to pay for the levies of successor bodies and interest of some £1·5 million on balances that no longer existed, having been squandered. When the Department of the Environment came to make its own calculations, when the mysteries were worked out and the entrails pored over—for presumably that is what goes on in Marsham street, being about as scientific an approach as can be managed—the rate support grant actually paid proved to be some £38,580,200, with some £3,352,200 from the GLC. The projected interest on balances was a debit figure, because the Conservative party left the council without any balances
Coming into power in 1986, the Labour administration had to face a budget with a built-in deficit in excess of £14 million. The problem is graphically illustrated by the council's total revenue expenditure in 1986–87, the first year of Labour control. People can hardly be blamed for


swallowing the myth of the high-spending, profligate Labour council. In the South Yorkshire Star, mentioned by a Conservative Member, it' something does not appear it has not happened; in some papers that my authority has to put up with, if something appears we can be sure that it has not happened.

Mr. McCartney: They quoted the Chancellor today.

Mr. Boateng: Such are the depths to which certain papers will sink to build up a political bogey-person and act accordingly.
That myth of the high-spending Labour council is not borne out by the figures. The council spent £189,921,084. That was just £3,042,924 more than the Tory budget—an increase of 1·6 per cent., less than the the rate of inflation. There is your profligate, high-spending Labour council.
Since then the Government in their wisdom—again, presumably consulting the entrails have continued to reduce their contribution to the council's budget, which has compounded the problem. We hear a great deal from Conservatives about creative accountancy, and of course we must be wary of it: no one pretends that it is to be entered into lightly or welcomed with open arms. We must, however, face the fact that the creative accountancy that we in Brent are now having to handle was introduced by the Tory-Liberal administration in 1987, and the exigencies of fortune have required a successor Labour authority to continue with it.
That is the truth. It is not some pie-in-the-sky figment of a rabid Left-wing imagination. The facts can be discovered by looking at the books, and I invite the Department to do just that. I ask the Minister to consult his advisers and to find out whether he can reasonably dispute any figure given in this debate by me or my hon. Friend the Member for Perry Barr. Those are the figures on which the Department is basing its assumptions about Brent's spending.
The background is made still worse by changes in Government regulations, often made at a moment's notice. I still hope that there is a glimmer, a sliver of a chance that the Department may yet think again about this charge, because of the weight of representations received from local authorities, again of all political persuasions. The Minister will know only too well the impact on authorities of the announcement of the change in the method of subsidy for homeless families. That cost my authority a little under £4 million at a stroke—at a grimace from the Secretary of State. Many of us remember the afternoon, and the spirit in which, it was announced. I am afraid that the spirit was much closer to vindictiveness and glee than to any genuine concern about the impact of the decisions on homeless families.
We hope that the Secretary of State will reconsider, but the local authority has already had to respond to the circumstances. It has made some difficult decisions that have been painful for my constituents, and very painful for disabled people like those whom I met only a few days ago at the Stonebridge training centre. Trainees there, many of them suffering from Down's syndrome, are able to make a small contribution to the working economy by putting together packets of cosmetics which are then used in hotels. They gain considerable satisfaction from so doing. Above all, they gain a sense of their own worth and value by being paid £4 a week, the meagre amount that they are

allowed without falling foul of the social security benefit system. As a result of the last round of cuts forced on my local authority by this Government, that £4 was removed. What does one say to those people? There are so many of them.
People find that their local library, such as the one in Kensal rise, is to be shut. They are forced to fall back on the generosity, which one hopes will be forthcoming, of All Souls which has a traditional and long-standing relationship with that library. All Souls bequeathed it in the first place and it was opened by Mark Twain. People are forced to fall back on that sort of private charity to keep the library open because the local authority, subject to current restraints, cannot do so. So it goes on and on. The number of teachers in schools throughout my constituency has been reduced. Social service night duty has been cut, so now there is no official night duty service. One can imagine the impact of that on some of the most deprived and at-risk families and children.
That is just a sample for the Minister. I urge him to ensure that those we advise him examine what the impact will be on the ground. What else do they want us to cut? Have we yet reached the stage when the DOE can come and say, "Cut this, cut that., cut the other," so that at least it can take the blame for the decisions which local authorities are being forced to make?
One of the great evils of the rate support grant system is the way in which the blame is transferred to local councillors and the Government walk away from the problems and turn their back on the people. That is unacceptable, whether in a Labour, Liberal or Democrat—whatever the party is called now—Conservative or hung local authority.
If the Bill is not amended as my hon. Friend the Member for Perry Barr suggests, its impact on my local authority will be a retrospective clawback of £8·8 million. There is no way that that money can be clawed back without either a rate rise of about 8 per cent. over and above any increase already agreed in the budget-making process—it was hoped to keep increases to a bare minimum—or a further round of cuts. In my constituency neither the voluntary organisations nor the residents and ratepayers find the burden of another round of cuts acceptable. The existing round has already had an unacceptable impact on them and the quality of their lives.
I cannot stand by and watch the Government force the local authority to make cuts in order to obey the law. I do not see how the imposition of an additional rate burden of 8 per cent. on my constituents as a result of the machinations at Marsham street can be justified. Why should already hard-pressed people suffer, as a result of this legislation, which is designed ostensibly to reduce the burden of rates on them, a further increase and burden?
I ask the Minister to think again and to be prepared to come with his civil servants to meet my local authority and me to explain how it will be possible to manage the local authority budget within the constraints that the Bill will impose. I ask him to think again and to respond positively to the pleas from both sides of the Committee for the amendment.

Mr. Gummer: We have had a useful debate on this good set of amendments. They put before the House the various possibilities before the Government in trying to arrange for the transitional period from our present system to a future one. The hon. Member for Birmingham, Perry Barr


(Mr. Rooker) rightly said that we do not want to go over the debates that we had earlier, but he made one point which I should like to discuss with him and which we should put right on the record.
Some time ago, I came to these discussions to try to find the best way to face this issue. Although I inherited the debate and the announcement—

Mr. Rooker: It is somebody else's fault.

Mr. Gummer: I am merely saying that I inherited this matter, so naturally I looked at it with care. Therefore, what I have to say is the fruit of trying with an open mind to see what it is best to do.
Naturally, there are many attractions in having the other dates which have been suggested and I shall deal with each case on the basis that it will probably cover a reasonable cross-section of local authorities. Common to all the cases is the fact that they are the cases of local authorities for which another date would have been preferable. They are not cases of local authorities which would suffer by having another date. [Interruption.] I am trying to approach the hon. Gentleman's point with considerable care. I took what he said seriously and I hope that he will do the same with my comments.
Whatever the date, the authorities that wish us to choose another date are always those which are discommoded by the date. One does not hear of the authorities which benefit from the date and would be discommoded by another date.

Mr. Michael: Will the Minister give way?

Mr. Gummer: No. When I come to deal with Cardiff, the hon. Gentleman will undoubtedly want to question me closely. I do not want to run away from any of the specific points which he raised.
In our original debate, I recognised that, whatever we did, some local authorities would be put out by the date that we chose. I also said that they would not necessarily be controlled by Opposition parties. The hon. Member for Brent, South (Mr. Boateng) asked that we should not consider this in a narrow party way, and I wish to make it clear that there is no question of this date being harder on authorities of one political persuasion than another. That is not the case, and I hope that he will take that from me. However one chooses these dates, it is not a question of picking out one particular party for benefit, so I have to look at the individual cases.
I understand the West Somerset case. The hon. Member for Perry Barr is right in the sense that West Somerset is likely to lose by this date compared with what it might have lost if another date had been chosen. It is true for any date that some will lose and some will gain. The question then is, who should be blamed for it. If there were no possibility of creative accounting and if we could reach agreements with all authorities on a fair basis, we could undoubtedly be more flexible.
I fear that it is not the Government that West Somerset must blame. Over the years, several authorities have behaved in ways which were inconceivable in the past. They have taken it on themselves to determine what the national figure for spending should be by seeking to take from the pool more than they should under the rules or any sensible sense or spirit of the rules. If West Somerset

asks who should be blamed, I would reply, "Authorities that have used methods of calculation of their grant requirement and expectation that decent authorities would not have used." I do not include all authorities in that, and I certainly do not say that of Cardiff.
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The hon. Members for Perry Barr and for Brent, South mentioned Brent council, which is an important case that I should consider carefully. The first suggestion is that, if we had chosen another date, Brent would have done better than it has. The second suggestion that has been carried all the way through is that we should be careful about Brent because, although it has been badly reported in the newspapers, it has done its best and we are being unfair.
I wish to consider Brent as fairly as possible. I have listened to the hon. Members' figures, but the House should be aware that those figures were available to the hon. Member for Brent, East (Mr. Livingstone). Having examined those figures, he said that Brent council—controlled by the Labour party—reminded him of the Pol Pot regime in Cambodia. It is at least open to the House to take a different view of the way in which Brent council has handled its affairs from the one put forward by the hon. Member for Brent, South. Two Labour Members in adjacent constituencies represent the council, first, as a paragon of virtue and, secondly, as probably the worst council that ever existed. We start with a pretty even-minded view from the Labour party, and I shall try to be as moderate as I can in my response.

Mr. Boateng: To call my local authority a paragon of virtue would be somewhat over-egging the pudding, but when has the Minister ever taken seriously a word said by my hon. Friend the Member for Brent, East (Mr. Livingstone)? For him now to rely on something said by my hon. Friend to a newspaper as an indictment of my local authority, and a reason for him not to treat it sympathetically, is trying it on a bit.

Mr. Gummer: I thought that I had introduced the point in the most moderate way possible. I merely suggested that there was disagreement—I put it no stronger than that—between two members of the same political party about the character of the local authority that they represent. I have tried to look for the facts.
Of course I take seriously the views of the hon. Member for Brent, East. That is why I spent much time opposing them in London. His views were so serious as to be worth considerable opposition. In those days, the hon. Member for Brent, South was a great supporter of his hon. Friend and commended his views to us. He fought—not in this place, but elsewhere—for the retention of the body of which the hon. Member for Brent, East was leader so that those views could be imposed not just on Brent but on all of Greater London.

Mr. Boateng: I commended my hon. Friend the Member for Brent, East when he was leader of the Greater London council, and was glad to serve under him. I commended him as an expert on the affairs of London, not as a political commentator on nasty regimes in south-east Asia. As a commentator on political regimes in south-east Asia, seeking to draw analogies between them and local authorities in London, my hon. Friend is not necessarily a man on whom the Minister can rely to bolster his very weak argument.

Mr. Gummer: The hon. Member for Brent, East was not comparing the Pol Pot regime with the local council in Brent. He was comparing the local council in Brent with the Pol Pot regime.

Mr. Rooker: We asked the Minister to consider the figures for Brent, not what I or my hon. Friend may have said. The Minister is making great play of this point. The leaders of Brent council made a substantial, detailed, four-page reply to my hon. Friend the Member for Brent, East (Mr. Livingstone). It would be in no one's interest for me to place it on the record, but its response to the comparison with the Pol Pot regime was that it was "dishonest, opportunistic and mendacious". Will the Minister explain why Brent, having taken the courageous decision to balance the budget and make cuts, will suffer a further cut of £8 million?

Mr. Gummer: As there seemed to be a disagreement about this in Brent, I was trying to establish that we should examine the figures carefully, and that is what I shall do.
The first fact is that the rate in Brent is the second highest in outer London. In 1988–89, its reported figure of total expenditure is 11·5 per cent. above the needs assessment, not taking into account the spending financed by creative accounting. We have always said that we should consider not only the amounts of money that people lose, but the amounts of money that others gain. Although it is true that, if we had chosen another date, Brent might have been about £8 million better off than it appears to be under this arrangement, Opposition Members have not mentioned the fact that, as a result of the forthcoming supplementary reports, Brent will gain an extra £9·4 million. We must set that gain against any reduction. The hon. Member for Brent, South must accept that those two facts should be considered together and that the rate increases that he feared will probably be unnecessary.
I am trying to examine the matter as fairly as I can, but it is difficult to take Brent's claim seriously. The hon. Members for Brent, South and for Perry Barr explained the problems. London authorities do not have the easiest of wickets, but the truth is that the figures that we should have received on 29 February were still outstanding on 12 May, although some figures were given on the telephone. On 17 May, Brent promised to send the form by the Whitsun weekend. On 7 June, having been telephoned again, the council said that it hoped to send the form by Friday 17 June. On 20 June, the council said that it was having difficulty finalising the figures, but it telephoned back to give another figure. On 21 June, we wrote confirming one figure and asked for the form to be returned as soon as possible.
We cannot deal with an authority that does not appear to be able to do what every other authority—bar one—has done. I do not wish to repeat stories from newspapers, and I have been careful not to do so, but it is extremely difficult to deal with an authority that appears not even to know who are its council tenants and who are not, and which admits that it is beyond its power to find out, except on a sample survey basis. The hon. Member for Brent, South mentioned cuts, but any independent observer of Brent—I leave aside him and the hon. Member for Brent, East—would say that the cuts were introduced in so

incompetent, extreme and haphazard a manner as to cause as much damage as possible, although the council could have done many other things.
I shall give hon. Members an example. At the same time as cutting the number of teachers in schools, Brent is recruiting teachers in Ireland. How can one deal with an authority which deals with its own electorate in that way? The hon. Gentleman said—I wrote this phrase clown because I wanted to quote it—that we should be concerned with the unemployed, the elderly and those who are particularly dependent upon the local authority. I believe that we should be. However, given that, roughly speaking, Brent is about £1 million better off under the arrangements so far announced, the hon. Gentleman would do better if—perhaps in a less unattractive way than his next-door neighbour—he brought home to Brent the fact that the real answer would be for Brent not to complain about this and about the extra gains from the supplementary report, but to get its act together and run the system properly.
It does not matter what happened in the past, and the hon. Gentleman did not mention the period in which the present authority was run by an apparently more extreme group. If Brent does not do this, there will be statements in the newspapers daily—which it does not appear to be able to deny—which show that there are apparently people in Nigeria who can buy the keys to council properties in Brent.
Brent cannot honestly be used as an example of the sort of authority for which the whole system must be rewritten. I believe that it is the sort of authority that has to get its house in order. When it does so, no doubt we can take more seriously the views of the hon. Member for Brent, South and forget the comparison with the Pol Pot regime, which I agree with him was rather overstated. I am sure that anyone who has any real acquaintance with the Pol Pot regime would not suggest that there is any comparison, because the local authority in Brent has not gone out to kill people. However, it has failed to carry out its obligations as an authority and it would be better for the hon. Gentleman to consider those points.
Having dealt with Brent, where I do not believe there is a case, I must deal with a much more difficult case. I say to the hon. Member for Cardiff, South and Penarth (Mr. Michael) that I do not know of any date on which there would not be a case such as that of Cardiff, South and Penarth. I say that, too, to my hon. Friend the Member for Cardiff, North (Mr. Jones). Wherever there is a stocktaking line, there will be at least one or perhaps more authorities which will say to us, "Look, we are especially hard it, because we have done everything that you wanted us to do except that we have not quite met the obligations that you have made, so can we change it slightly?"
That is the problem of all the other amendments put forward by the hon. Member for Perry Barr. Each one of those amendments suggests that, for apparently good reasons, the goal posts should be moved slightly, but each one of them provides us with what I would call a Cardiff, South and Penarth situation, because there will always be one or more which will appear to fall just outside the line that is drawn. Therefore, I must justify to the hon. Member for Cardiff, South and Penarth why this line seems to be a better one than others, and then I shall explain to him why I do not believe one can take a particular view of his authority.
Using this line, we know exactly where we are from that point. No authority claims that we have interpreted our


own rules in a way which produces the wrong figure. We know exactly where we are. It enables local authorities to make their plans for the future much more effectively, and it makes that transit possible. The hon. Member for Ashfield (Mr. Haynes) may yawn, but I am trying to answer the specific cases—which I am sure he would have heard if he had been here—of the hon. Member for Cardiff, South and Penarth, who has made an important point, which I hope I am dealing with as carefully as possible.
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The problem is that any other date would raise all kinds of arguments, which would mean that the argument of the hon. Member for Cardiff, South and Penarth and that of my hon. Friend the Member for Cardiff, North would become multiplied. I say to the hon. Gentleman that it is a date which does not serve Cardiff well. It means that, had we chosen another date, Cardiff would have been able to benefit from the cuts that it has made. However, what worries me is that almost every other authority in his area reflected such cuts in the figures that they put in.

Mr. Michael: indicated dissent.

Mr. Gummer: The hon. Gentleman shakes his head, but I have been careful about checking this. However, if I am wrong, I shall apologise to him. As I understand it, almost all the cuts which we are talking about could have shown up at the date that the figure was sent in. The chief financial officer signed the document as being the best estimate available at the time. I find it difficult to believe that those cuts were started, continued and completed between the form being sent in and the date which he now says, if he had only put in the next form early enough, he could have reflected them. I must say that that does not appear to be likely. Therefore, although I understand that Cardiff will be unhappy about this—I am sorry that that will be so—it must be true if there is a cut-off date of any kind.
It appears to me that, if I move in the direction of the hon. Member for Cardiff, South and Penarth on this issue, that I must then talk about the contribution made by my hon. Friend the Member for Crosby (Mr. Thornton), about the Merseyside residuary body. He has already explained that the problem there is that there is an argument between the auditor and the authority. Until that argument is solved, we do not even know the basis upon which the authority would like us to choose between the two figures, both of which have been given to us—the earlier figure which it appears now to want us to take or the later figure that we have taken because we have said that we would take the later figure. That is the same kind of problem as that of the hon. Member for Cardiff, South and Penarth. I believe that there is no way round having a date, and with any date, if he were not the one who was asking me this point, I would have to answer other hon. Members who would be putting forward their points.

Mr. Michael: I hope that I can assist the Minister by providing exactly the sort of suggestion that will meet his requirements. The Minister knows full well that the Secretary of State for the Environment and the Secretary of State for Wales said in the House that the figures that would count would be those for the actual expenditure

rather than those for the estimated expenditure by an authority. As the Minister must know, he refers to a form that deals with estimated rather than actual expenditure. The Minister's reference to the so-called choice of dates clouds the simple point that I shall make once more.
The Government had already chosen their date and the Government are seeking in the Bill retrospectively to change their date without any regard to principle or reason. The Government's date was 31 July. That was set in the letter from the Welsh Office dated 29 July. That letter could have specified 6 July, but instead it specified 31 July. My only plea is that, having made a promise, the Government should stick to it and, having chosen a date on which others relied as they were meant to rely, the Government should stick to it.

Mr. Gummer: In order to support that line, the hon. Gentleman quoted two authorities, one which said that we needed to be careful about retroactive laws in order to be sure that we are certain and stable, and, secondly, as Professor Goodhart said, the law should be general and not designed for one particular person. This date has been chosen in order to be certain and stable, because if we did what the hon. Gentleman suggested, it would give people the opportunity retroactively to change what had happened in the past by creative accounting. It is not that his local authority might do so, but that many other local authorities would.

Mr. Thornton: rose—

Mr. Gummer: I do not think that I should give way, because there are a number of debates to come and I have been speaking for some time, but I shall do so for the last time.

Mr. Thornton: My right hon. Friend has said that, on Merseyside, there is a disagreement between the district auditor and the residuary body, but that is not the case. The disagreement concerns the interpretation of the Department's figures. In a letter from the district auditor to the Merseyside residuary body dated 28 October it states clearly:
It would appear, therefore, that whilst the RS1B submitted to the department accurately reflects the accounts which were presented in accordance with accepted practice … the effect has been for the DoE to treat the prior years adjustments as having implications for block grant entitlement which is not in accordance with the DoE letter of 14 February 1985.
My simple plea is that we allow the residuary body to submit its figures in line with the Department's accustomed practice.

Mr. Gummer: There is a disagreement between the auditor and the local authority, which continues. We said, for the benefit of all local authorities, that we would take the last figure given to us and that we would not argue that we should take the smallest or the largest one. We said that we would take the last one, as we said that that would be the one most likely to be of help to a local authority.

Mr. Gwilym Jones: rose—

Mr. Gummer: No, I will not give way. [HON. MEMBERS: "Give way."] I have already said that I will not give way.
I believe that the hon. Member for Truro (Mr. Taylor) should look at the figures in the round because quite a few of them will show that his comments have been unfair.
The hon. Member for Makerfield (Mr. McCartney) put the case for Wigan, which is likely to lose £48,000 on closedown. The hon. Gentleman did not mention, however, that, on the total supplementary report, Wigan is likely to gain £725,000, which is important. When the hon. Gentleman makes his case about the sadness and difficulties of Wigan he must take the figures in the round. In that way it is clear that Wigan will gain substantially and lose marginally.
The hon. Gentleman also mentioned the Greater Manchester fire and civil defence authority and said that it would lose money. I believe that he got the million in the wrong place, but I accept that, if that authority had given the best answer that it could, it is likely that it might have got an additional £900,000. If one considers the forthcoming supplementary report, however, one sees that the Greater Manchester fire and civil defence authority is set to gain £1·6 million. Therefore, far from being a net loser, that authority is a net gainer.

Mr. McCartney: rose—

Mr. Gummer: I refused to give way to one of my hon. Friends, so I must refuse to give way to the hon. Gentleman.

Mr. McCartney: On a point of order, Mr. Walker. Is it not the tradition of this House that, if a Minister names an hon. Member, that Member is then given the opportunity to respond?

The Chairman: It is entirely a matter for the Minister whether he gives way or not.

Mr. Gummer: There will he other occasions tonight on which what the hon. Member for Makerfield has said can be raised again. I hope that the hon. Gentleman will accept that I have given way most generously, and that I must press on.
I accept that there is a problem about Suffolk, which will lose money because of the proposed date. My hon. Friend the Member for Suffolk, Central (Mr. Lord) should consider that, if any of the other suggested dates were chosen, other authorities would lose and would argue that another date should be chosen—I accept that what happens to other authorities may not be as embarrassing to him and me.
In future, it is unlikely that, overall, there will be any gain for the Treasury. It is much more likely that, in terms of total grant, the local authorities will benefit year to year in a way that will gain the approval of my hon. Friend the Member for Suffolk, Central. I realise that Suffolk has a particular difficulty, but I cannot see how I can do something for Suffolk without producing something for other authorities which are just outside its area.
I do not believe that any of the amendments tabled by the Opposition will help us out of the problems that are bound to arise when one moves from one system to another. There is a need for a stocktaking date, and I believe that the proposed one is fair and absolutely clear. It means that we can start the new system in a certain manner so that people know where they are. I do not believe that any alternative date or method would achieve that end. For the benefit of all local authorities, I believe that it would be better to stick to the proposed date than to go with any other more complicated system that would only produce further difficulties.

Mr. William O'Brien: The Minister has done nothing to explain why the Government have chosen a particular date or why they should penalise local government through the rate support grant allocations.
It has been made abundantly clear that the Minister is not aware of what is taking place or what has been said in the debate. Even the hon. Member for Crosby (Mr. Thornton) had to remind the right hon. Gentleman that his response was misleading and that the issue that the hon. Gentleman had put to his right hon. Friend had not been addressed in his reply. At no time has the Minister said why 7 July has been chosen as the cut-off date, which the Minister has described as a fair date.
My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) gave five examples of how the Government and the Department of the Environment could consider the problems facing authorities. My hon. Friend the Member for Makerfield (Mr. McCartney) has already referred to the Greater Manchester fire and civil defence authority, on which he used to serve, which will lose nearly £1 million. During the two years in question my authority of West Yorkshire could lose £700,000 because of the cut-off date. The Minister should be aware of the problems that will face local authorities and joint committees because of his Department's action, which will stop all consideration of approved expenditure by local authorities after 7 July.
The Minister did not address any of the five suggestions put forward by my hon. Friend the Member for Perry Barr. I believe that it is unfair to bulldoze the Bill through without giving fair consideration to the issues involved in the amendments.
Reference has been made to West Somerset. The Minister said that those ratepayers should know who to blame if their rates increased because of a reduction of £133,000 in rate support grant. That is what they will suffer because of the cut-off date proposed by the Secretary of State. I hope that the ratepayers of West Somerset will realise, in common with the ratepayers of many other local authorities, that the real reason for the increase in rates lies with no other person than the Secretary of State.
A letter sent by the Secretary of State to his right hon.Friend the Member for Bridgwater (Mr. King) said:
I do of course understand the disappointment of authorities, like West Somerset, which have spent less in 1987–88 than they had previously reported to the Department but will not now gain any extra grant as they had expected to do
7.30 pm
Therefore, the Secretary of State admits that there is disappointment and that such local authorities are being unfairly treated. They agreed to the terms set by the Secretary of State, but now they are being told that they will not be compensated for meeting the criteria set by the Department.
We believe that the amendments will redress the imbalance that local authorities will suffer if the Bill is passed. I draw the attention of hon. Members, particularly those who have not been here thoughout the debate, to the fact that contributions from both sides of the Committee have all been critical of the Bill. I hope that Tory Members who are here for the Division will note that their colleagues are dissatisfied with the way in which the Bill is being applied to local authorities. I hope that all hon. Members will support the amendment.

Question put, That the amendment be made:—

The Committee divided: Ayes 174, Noes 235.

Division No. 469]
[7.31 pm


AYES


Abbott, Ms Diane
Gordon, Mildred


Adams, Allen (Paisley N)
Gould, Bryan


Allen, Graham
Grant, Bernie (Tottenham)


Anderson, Donald
Griffiths, Nigel (Edinburgh S)


Archer, Rt Hon Peter
Griffiths, Win (Bridgend)


Armstrong, Hilary
Grocott, Bruce


Banks, Tony (Newham NW)
Hardy, Peter


Barnes, Harry (Derbyshire NE)
Hattersley, Rt Hon Roy


Barnes, Mrs Rosie (Greenwich)
Heffer, Eric S.


Barron, Kevin
Henderson, Doug


Beckett, Margaret
Hinchliffe, David


Beith, A. J.
Hogg, N. (C'nauld &amp; Kilsyth)


Bell, Stuart
Holland, Stuart


Benn, Rt Hon Tony
Howarth, George (Knowsley N)


Bennett, A. F. (D'nt'n &amp; R'dish)
Howell, Rt Hon D. (S'heath)


Bermingham, Gerald
Hoyle, Doug


Bidwell, Sydney
Hughes, John (Coventry NE)


Blair, Tony
Hughes, Robert (Aberdeen N)


Blunkett, David
Hughes, Roy (Newport E)


Boateng, Paul
Hughes, Sean (Knowsley S)


Boyes, Roland
Illsley, Eric


Bradley, Keith
Janner, Greville


Bray, Dr Jeremy
John, Brynmor


Brown, Gordon (D'mline E)
Jones, Barry (Alyn &amp; Deeside)


Brown, Nicholas (Newcastle E)
Jones, Martyn (Clwyd S W)


Brown, Ron (Edinburgh Leith)
Kinnock, Rt Hon Neil


Buchan, Norman
Kirkwood, Archy


Buckley, George J.
Leadbitter, Ted


Caborn, Richard
Leighton, Ron


Callaghan, Jim
Lestor, Joan (Eccles)


Campbell, Menzies (Fife NE)
Lewis, Terry


Campbell, Ron (Blyth Valley)
Litherland, Robert


Campbell-Savours, D. N.
Livingstone, Ken


Clark, Dr David (S Shields)
Lofthouse, Geoffrey


Clay, Bob
Loyden, Eddie


Clelland, David
McAvoy, Thomas


Clwyd, Mrs Ann
McCartney, Ian


Cohen, Harry
McKelvey, William


Coleman, Donald
McLeish, Henry


Cook, Frank (Stockton N)
McNamara, Kevin


Cook, Robin (Livingston)
Madden, Max


Corbett, Robin
Mahon, Mrs Alice


Cox, Tom
Marek, Dr John


Crowther, Stan
Marshall, Jim (Leicester S)


Cryer, Bob
Martlew, Eric


Cunliffe, Lawrence
Michael, Alun


Cunningham, Dr John
Michie, Bill (Sheffield Heeley)


Davies, Rt Hon Denzil (Llanelli)
Mitchell, Austin (G't Grimsby)


Davies, Ron (Caerphilly)
Morgan, Rhodri


Davis, Terry (B'ham Hodge H'l)
Morley, Elliott


Dixon, Don
Morris, Rt Hon A. (W'shawe)


Dobson, Frank
Mowlam, Marjorie


Doran, Frank
Murphy, Paul


Duffy, A. E. P.
Nellist, Dave


Eastham, Ken
Oakes, Rt Hon Gordon


Evans, John (St Helens N)
O'Brien, William


Ewing, Harry (Falkirk E)
O'Neill, Martin


Fatchett, Derek
Orme, Rt Hon Stanley


Faulds, Andrew
Patchett, Terry


Fearn, Ronald
Pike, Peter L.


Field, Frank (Birkenhead)
Powell, Ray (Ogmore)


Fields, Terry (L'pool B G'n)
Primarolo, Dawn


Fisher, Mark
Quin, Ms Joyce


Flannery, Martin
Randall, Stuart


Flynn, Paul
Redmond, Martin


Foot, Rt Hon Michael
Richardson, Jo


Foster, Derek
Roberts, Allan (Bootle)


Fraser, John
Robertson, George


Galbraith, Sam
Robinson, Geoffrey


Galloway, George
Rogers, Allan


Garrett, John (Norwich South)
Rooker, Jeff


Gilbert, Rt Hon Dr John
Ross, Ernie (Dundee W)


Godman, Dr Norman A.
Rowlands, Ted





Sedgemore, Brian
Wall, Pat


Sheerman, Barry
Wallace, James


Sheldon, Rt Hon Robert
Walley, Joan


Shore, Rt Hon Peter
Wardell, Gareth (Gower)


Short, Clare
Wareing, Robert N.


Skinner, Dennis
Welsh, Michael (Doncaster N)


Smith, Andrew (Oxford E)
Williams, Rt Hon Alan


Snape, Peter
Williams, Alan W. (Carm'then)


Soley, Clive
Wilson, Brian


Spearing, Nigel
Winnick, David


Steel, Rt Hon David
Wise, Mrs Audrey


Steinberg, Gerry
Worthington, Tony


Stott, Roger



Taylor, Matthew (Truro)
Tellers for the Ayes:


Thompson, Jack (Wansbeck)
Mr. Frank Haynes and


Turner, Dennis
Mrs. Llin Golding.




NOES


Alexander, Richard
Evennett, David


Alison, Rt Hon Michael
Fairbairn, Sir Nicholas


Amess, David
Fallon, Michael


Amos, Alan
Favell, Tony


Arnold, Tom (Hazel Grove)
Fenner, Dame Peggy


Ashby, David
Field, Barry (Isle of Wight)


Aspinwall, Jack
Finsberg, Sir Geoffrey


Atkins, Robert
Fishburn, John Dudley


Baker, Nicholas (Dorset N)
Forman, Nigel


Baldry, Tony
Forsyth, Michael (Stirling)


Banks, Robert (Harrogate)
Forth, Eric


Batiste, Spencer
Franks, Cecil


Beaumont-Dark, Anthony
Freeman, Roger


Bendall, Vivian
Fry, Peter


Bennett, Nicholas (Pembroke)
Gale, Roger


Benyon, W.
Gardiner, George


Bevan, David Gilroy
Garel-Jones, Tristan


Blackburn, Dr John G.
Gill, Christopher


Bonsor, Sir Nicholas
Glyn, Dr Alan


Boswell, Tim
Goodhart, Sir Philip


Bottomley, Peter
Goodlad, Alastair


Bottomley, Mrs Virginia
Goodson-Wickes, Dr Charles


Bowden, Gerald (Dulwich)
Gorman, Mrs Teresa


Bowis, John
Gow, Ian


Boyson, Rt Hon Dr Sir Rhodes
Gower, Sir Raymond


Brazier, Julian
Grant, Sir Anthony (CambsSW)


Bright, Graham
Greenway, Harry (Ealing N)


Brooke, Rt Hon Peter
Greenway, John (Ryedale)


Brown, Michael (Brigg &amp; CI't's)
Gregory, Conal


Bruce, Ian (Dorset South)
Griffiths, Peter (Portsmouth N)


Buck, Sir Antony
Grist, Ian


Budgen, Nicholas
Ground, Patrick


Burns, Simon
Grylls, Michael


Burt, Alistair
Gummer, Rt Hon John Selwyn


Butcher, John
Hamilton, Hon Archie (Epsom)


Butler, Chris
Hamilton, Neil (Tatton)


Butterfill, John
Hampson, Dr Keith


Carlisle, Kenneth (Lincoln)
Hanley, Jeremy


Carrington, Matthew
Hargreaves, A. (B'ham H'll Gr')


Cash, William
Hargreaves, Ken (Hyndburn)


Chope, Christopher
Harris, David


Clark, Hon Alan (Plym'th S'n)
Haselhurst, Alan


Clark, Dr Michael (Rochford)
Hayes, Jerry


Clark, Sir W. (Croydon S)
Hayhoe, Rt Hon Sir Barney


Clarke, Rt Hon K. (Rushcliffe)
Hayward, Robert


Colvin, Michael
Heathcoat-Amory, David


Coombs, Anthony (Wyre F'rest)
Heddle, John


Coombs, Simon (Swindon)
Hicks, Robert (Cornwall SE)


Cope, Rt Hon John
Higgins, Rt Hon Terence L.


Cran, James
Hogg, Hon Douglas (Gr'th'm)


Currie, Mrs Edwina
Hordern, Sir Peter


Curry, David
Howard, Michael


Davis, David (Boothferry)
Howarth, Alan (Strat'd-on-A)


Day, Stephen
Howarth, G. (Cannock &amp; B'wd)


Devlin, Tim
Howell, Rt Hon David (G'dford)


Dickens, Geoffrey
Howell, Ralph (North Norfolk)


Dorrell, Stephen
Hughes, Robert G. (Harrow W)


Dover, Den
Hunt, David (Wirral W)


Dunn, Bob
Hunt, John (Ravensbourne)


Durant, Tony
Hunter, Andrew


Dykes, Hugh
Irvine, Michael


Emery, Sir Peter
Irving, Charles






Jack, Michael
Paice, James


Janman, Tim
Patnick, Irvine


Jessel, Toby
Patten, John (Oxford W)


Johnson Smith, Sir Geoffrey
Pattie, Rt Hon Sir Geoffrey


Jones, Robert B (Herts W)
Pawsey, James


Jopling, Rt Hon Michael
Peacock, Mrs Elizabeth


Kellett-Bowman, Dame Elaine
Porter, Barry (Wirral S)


Key, Robert
Porter, David (Waveney)


Knapman, Roger
Portillo, Michael


Knight, Dame Jill (Edgbaston)
Powell, William (Corby)


Knox, David
Price, Sir David


Lamont, Rt Hon Norman
Raffan, Keith


Lang, Ian
Raison, Rt Hon Timothy


Lawrence, Ivan
Renton, Tim


Lawson, Rt Hon Nigel
Ridley, Rt Hon Nicholas


Lee, John (Pendle)
Ridsdale, Sir Julian


Leigh, Edward (Gainsbor'gh)
Roe, Mrs Marion


Lennox-Boyd, Hon Mark
Rossi, Sir Hugh


Lester, Jim (Broxtowe)
Rost, Peter


Lloyd, Sir Ian (Havant)
Rowe, Andrew


Lloyd, Peter (Fareham)
Rumbold, Mrs Angela


Lord, Michael
Ryder, Richard


Lyell, Sir Nicholas
Scott, Nicholas


McCrindle, Robert
Shaw, David (Dover)


Macfarlane, Sir Neil
Shaw, Sir Michael (Scarb')


MacGregor, Rt Hon John
Shelton, William (Streatham)


MacKay, Andrew (E Berkshire)
Shephard, Mrs G. (Norfolk SW)


McLoughlin, Patrick
Shepherd, Colin (Hereford)


McNair-Wilson, Sir Michael
Shepherd, Richard (Aldridge)


McNair-Wilson, P. (New Forest)
Shersby, Michael


Madel, David
Sims, Roger


Malins, Humfrey
Skeet, Sir Trevor


Mans, Keith
Smith, Tim (Beaconsfield)


Maples, John
Speed, Keith


Marlow, Tony
Spicer, Sir Jim (Dorset W)


Marshall, John (Hendon S)
Spicer, Michael (S Worcs)


Marshall, Michael (Arundel)
Stern, Michael


Martin, David (Portsmouth S)
Stewart, Andy (Sherwood)


Maude, Hon Francis
Stokes, Sir John


Mayhew, Rt Hon Sir Patrick
Stradling Thomas, Sir John


Mellor, David
Taylor, Ian (Esher)


Meyer, Sir Anthony
Taylor, John M (Solihull)


Miller, Sir Hal
Thompson, D. (Calder Valley)


Mills, Iain
Thornton, Malcolm


Mitchell, Andrew (Gedling)
Thurnham, Peter


Mitchell, David (Hants NW)
Vaughan, Sir Gerard


Moate, Roger
Waddington, Rt Hon David


Montgomery, Sir Fergus
Wakeham, Rt Hon John


Moore, Rt Hon John
Watts, John


Morrison, Rt Hon P (Chester)
Wheeler, John


Moss, Malcolm
Widdecombe, Ann


Moynihan, Hon Colin
Winterton, Mrs Ann


Mudd, David
Wolfson, Mark


Neale, Gerrard



Neubert, Michael
Tellers for the Noes:


Nicholson, David (Taunton)
Mr. David Maclean and


Onslow, Rt Hon Cranley
Mr. Tom Sackville.


Page, Richard

Question accordingly negatived.

Mr. O'Brien: I beg to move amendment No. 2, in page 1, line 20, at end insert—
'( ) Before making a calculation and notification under section 66(2) of the 1980 Act the Secretary of State shall take into account any reduction in a local authority's rateable value effective from the date on or before that which is relevant for determining the gross rateable value of the hereditaments in the authority's area under Part VI of the 1980 Act'.
The amendment requests the Secretary of State to consider the vast reductions in the rateable value of local authorities before the effective date set out in the Bill. It requires the Secretary of State to take into account reductions in rateable values when determining an authority's final grant entitlement. It will provide local authorities with financial compensation for the large

refunds of rates which they have been required to make as a result of two recent rating cases, the Addis v. Clement House of Lords decision and the Severn-Trent water authority v. Cakebread Court of Appeal case.
Addis v. Clement turned on a decision whether a factory on the borders of the lower Swansea enterprise zone could rely on the introduction of the enterprise zone to seek a reduction in rateable value on the grounds that the favourable treatment on rates for companies within the zone depressed rateable values immediately outside the zone. That matter causes concern wherever an enterprise zone operates. On that occasion the House of Lords found that ratepayers could obtain changes in rateable values to reflect changes in market conditions. That decision was contrary to the traditional view and it caused problems.
The case of the Severn-Trent water authority v. Cakebread affected the rating of individually rated water hereditaments particularly sewage treatment works. The Court of Appeal held that, because the Water Act 1973 changed the statutory definition of water hereditaments, separately rated water hereditaments should be covered by the statutory formula governing the rating of water undertakings even though the formula made allowances for them in its original state.
That decision was taken on 4 December last year and many repayments were made before 7 July, the magical date in the Bill. The Appeal Court judgment excluded hereditaments around water undertakings from rating. Apart from the changes proposed in the Bill, we can imagine what results the Appeal Court decision has had and will have on local authorities' rateable value assessments.
On 9 March, the Secretary of State announced that he intended to legislate to overturn the decisions of the House of Lords and the Court of Appeal and restore the law to its previous standing. His proposals were subsequently enacted in the Local Government Finance Bill which was before the House a few weeks ago. Local authorities were worried that the restoration of the law was effective only from 10 March. Successful appeals by ratepayers prior to 10 March, some going back to 1984–85, were allowed to stand. That resulted in some authorities having to pay large rate refunds, with a consequent reduction in rateable values. That is the backcloth to the amendment.
During the passage of the Local Government Finance Bill the Association of London Authorities supported amendments to the Secretary of State's proposals about retrospection. If accepted, those amendments would have avoided the need for authorities to make refunds. Having failed in that approach, the association sought compensation through the rate support grant system. Further representations to the Secretary of State appear to have fallen on deaf ears.
A letter from the Department of the Environment to the Association of County Councils refers in detail to the Severn-Trent water authority v. Cakebread. The letter is dated 3 October and I shall quote from it because it is important and pertinent to the amendment. The letter says:
The Local Authority Associations have made representations to the Department about the consequences for local authorities of the decision of the Court of Appeal in this case. In short, they argued that authorities would have to refund substantial amounts of rate income, and that this would have an unreasonable effect on their financial position. They


therefore argued that the Secretary of State should make some arrangements to compensate them through the RSG system or otherwise.
Ministers have carefully considered these arguments. As you will know, the law has been amended so as to restore the position to that which was understood to operate before the Cakebread decision as regards valuation proposals submitted after 10 March 1988. It has also been made clear by the legislation that section 9(2) of the General Rate Act 1967 has no application to these cases, and this has substantially reduced the maximum amount which the Water Authorities might have been able to reclaim from local authorities. Ministers do not, however, intend to bring forward any proposals to modify the existing RSG arrangements so as to provide any additional Exchequer resorces.
That means that the Department emphatically turned down the request from local authorities for compensation for the loss of rateable value as a result of the court decisions. The amendment refers to the period before 10 March and pertains to decisions which influenced local authorities to make refunds.
Current legislation provides for special arrangements in cases where local authorities have suffered a reduction in rateable value. The ceiling for that is that it must be more than 2·5 per cent. of the rateable value. Section 67 of the Local Government, Planning and Land Act 1980 empowers local authorities to apply to the Secretary of State for grant to be recalculated. Unfortunately, no authority met the rateable value criteria that resulted from the Cakebread and Addis cases.
The reduction in rateable values and the consequent liabilities to make refunds are significant. It is estimated that local authorities will have to refund no less than £90 million as a result of the Cakebread decision and between £30 million and £40 million as a result of the Addis case. The decisions have created tremendous problems for many authorities. I shall give some examples of the reductions in rateable values as a result of the decisions. The rateable value in Newham was reduced by £957,700.
In Trafford it was reduced by just under £500,000, in Sutton by £269,000, in Bradford by £212,700 and in Sheffield by £200,600. The rate refund paid by Newham was £2·3 million. Bradford paid £2·1 million, Wakefield £1·6 million, Bexley just over £1 million and Calderdale £692,000. Most of the money was paid before 10 March.
The Secretary of State should consider the problems facing local authorities. In addition to the refunds, they have to face cuts in rate support grant because of the cut-off date of 7 July. One can understand why local authorities are distraught. They also face a further reduction because no compensation will be paid for the fall in their rateable values.
This amendment would allow reductions in rateable values to feed through into grant entitlement, thereby providing some compensation for those authorities most seriously affected. I have already listed a number of those authorities. I ask the Minister to take into consideration the appeals that have been made by the various local authorities, and to agree that some consideration be given to the authorities that are most affected because of the decisions that have been taken.
8 pm
The amendment is a genuine approach to try to resolve a serious matter. It does not try to score points or steal any ground from the Secretary of State. It tries merely to redress the imbalance. We heard a great deal in the last

debate about cuts in services, and about how local authorities and those who serve on local authorities have had the traumatic experience of trying to meet the budget. Without any shadow of doubt, over the past nine years, local authorities have suffered tremendously because of Government decisions. The amendment will help to make some adjustment to the problems that are facing certain local authorities because of those decisions. I ask the Committee to accept amendment No. 2 because of its fairness and because it points out an anomaly that has arisen as a result of the decisions taken by the Secretary of State.

Mr. Lord: These amendments are linked to the group that we discussed with amendment No. 1, because of the power of the Government in both cases to put right what are seen as unfairnesses. I shall speak about the effects on county councils of the case of Severn-Trent Water v. Cakebread, with particular reference to Suffolk county council. I shall not rehearse the arguments, because the hon. Member for Normanton (Mr. O'Brien) has laid out the position fairly clearly. I am sure that my hon. Friend the Under-Secretary will not disagree with at least the framework of the way in which he laid down the case.
The result of the case is that Suffolk county council will have to repay £1·9 million to Anglia Water through no fault of its own. Clearly, that has a great impact on the rate level for next year and the way that the whole rating package is put together. The council would like the Government to introduce retrospective legislation so that it does not have to pay out this embarrassing amount of money. The Government are saying that they are not able to do that, but in another part of the Bill, they are doing just that. They are employing retrospective legislation to establish figures for the rate support grant for the forthcoming year, and by doing so, and by choosing in a fairly arbitrary way the date of 7 July, they are penalising Suffolk county council to the tune of £2·5 million. That means that Suffolk county council will lose a grand total of £4·4 million.
The Government cannot have it both ways. They should either allow retrospective legislation so that Suffolk county council does not have to meet the £1·9 million charge to Anglian Water, or they should not use retrospective legislation to calculate the rate support grant figures for the years ahead. There is a great anomaly. I am not talking about levels of services or levels of rates. I am talking simply about honesty and fairness in Government dealings. In this case, it is patently obvious to everyone that things have not been done as fairly as they ought to have been. I ask my hon. Friend the Under-Secretary, as I asked my right hon. Friend the Minister for Local Government earlier, to consider my remarks and those made by every other hon. Member tonight, and to see whether justice and fairness can be done so that these unfair penalties do not fall on county councils such as mine in Suffolk.

Ms. Joan Walley: I am in the unusual position of agreeing not only with what my hon. Friend the Member for Normanton (Mr. O'Brien) said from the Opposition Front Bench but with what the hon. Member for Suffolk, Central (Mr. Lord) said. I wish to place on record the grave concern with which Staffordshire county council views the Cakebread case and its results. Like those councils mentioned by my hon. Friend and the


hon. Member for Suffolk, Central, the Staffordshire county council is being badly penalised. There is an anomaly and the Government have it in their power to do something about that anomaly. There is no problem in the Government introducing retrospective legislation if they wish to.
It would be wrong of me to let the debate go by without saying that there should be full recognition of the grave effects that the Cakebread decision has had on county councils such as those in the area that I represent. Staffordshire county council was involved in lengthy legal proceedings when the Cakebread case was heard. The matter has been taken up by the council with hon. Members on both sides of the House representing the area, and the council has subsequently taken the matter up with the local authority associations.
I should like the Minister to accept that this is an anomaly with which the Government can and will deal, so that my county council will not have to make grave cuts because of a shortfall in expenditure caused by no fault of its own but by the fact that it has had to give huge amounts of money to the water authorities at a time when we all know that privatisation is just around the corner.

The Parliamentary Under-Secretary of State for the Environment (Mrs. Virginia Bottomley): The hon. Member for Normanton (Mr. O'Brien) put the facts clearly. Let me go over some of the ground. One of the key figures in determining how much grant each authority receives is its rateable value. The higher the rateable value, the less grant it needs. The 1980 legislation on rate support grant provides that the rateable value of each area is taken from the valuation list on the specified date. That date has always been 1 April, 12 months before the year in question. The gross figure taken from the valuation list is then adjusted to allow for the relief given to charities and to unoccupied buildings.
When a ratepayer challenges a rateable value, it often takes some time for the ratepayer's proposal to be determined. With complex legal cases, it can take several years. Rating law provides that the ratepayer enjoys the benefit of any reduction in rateable value going back to the date on which the proposal was made or, in some cases, 1 April of the rating year during which the proposal was made. This reduction in rateable value does not, however, have a retrospective effect for rate support grant purposes.
The amendment is designed to require the Secretary of State to take into account changes to the valuation list when calculating grant entitlement. The aim is that where a local authority faces a loss of rate income, for example because of a valuation decision, the authority should receive extra block grant in compensation.
Hon. Members on both sides of the Committee have described consequences for local authorities of the decisions in the Cakebread and Addis cases. In the former, as the hon. Member for Normanton said, the Court of Appeal found that certain premises used by all water authorities should not be separately rated as had always been thought to be the practice, but they were included within the formula rating arrangements applicable to the water industry. In the Addis case, the House of Lords found that the creation of an enterprise zone was a factor justifying a reduction in rateable value. That went against the conventional understanding that changes in economic circumstances were not grounds for changes in rateable value between normal revaluations.
In both cases, the Government took the view that the law, as declared by the courts, should not be allowed to stand and that the position should be restored to the one that had always been assumed to operate prior to the decisions. The Government therefore included the necessary clauses in the Local Government Finance Act 1988 to restore the position. The new basis applies to all proposals for revaluations made after 9 March—the date on which the Secretary of State announced the change.
We recognise that local authorities have had to make refunds in respect of the period up to the Secretary of State's announcement. As the hon. Member for Normanton said, about £95 million of rates will have to be refunded. Clearly, it is not possible to identify the amounts refunded as a result of the Addis case, although the hon. Gentleman made an estimate. Section 67 of the Local Government, Planning and Land Act 1980 makes provisions that, deal with changes in rateable values. It provides that once a conclusive calculation has been made for any year, an authority may serve a notice on the Secretary of State if the rateable value is reduced and the reduction exceeds a threshold. The Secretary of State must then pay extra grant to the authority.
The threshold is presently set at 2·5 per cent., so existing provisions mirror roughly the position sought by the amendment, except that the amendment does not provide for a threshold. The amendment seeks to provide that any reduction in rateable value would result in extra grant. It does not mention increases in rateable value, which could also occur. Local authority associations have made representations to the Government, asking that they should provide compensation for authorities that have had to make refunds as a result of the two cases.
We considered those representations carefully, but we concluded that there was no case for departing from the existing arrangements—which I have just described—which were introduced precisely to deal with such circumstances. It would not be sensible or reasonable for the block grant system to track every change in rateable value that may have an effect on an authority's circumstances. It is sensible to take the valuation list at the most convenient point before each grant year begins and to fix on that as the basis for the calculations.
Section 67 of the Local Government, Planning and Land Act 1980 provides a mechanism for dealing with cases in which subsequent changes in rateable value are excessive. The threshhold was set at 2·5 per cent. by statutory instrument and the Opposition did not pray against it. The provisions are available to local authorities if the case under consideration fits the conditions set out. We see no overwhelming case for changing the provisions at present.
8.15 pm 
My hon. Friend the Member for Suffolk, Central (Mr. Lord) referred to Suffolk county council. I realise that Suffolk county council will be disappointed that, in the Cakebread case, the Court of Appeal found for the ratepayer rather than the district valuer and that, as a result, a refund of rates has had to be made. For reasons given by my right hon. Friend the Minister for Local Government, that coincided for Suffolk with the date of 7 July. However, the cumulative loss for Suffolk for all the years affected amounts to less than 1·5 per cent. of the rate income for one year.
I do not have the precise figure, but I can confirm that it is less than 1·5 per cent. However, I can offer my hon. Friend some comfort. The full supplementary reports are due to be made shortly and are about to go out for consultation. They are likely to result in an additional £1·1 million of grant to Suffolk.
Some hon. Members, including my hon. Friend the Member for Suffolk, Central, have argued that retrospective legislation to reverse the court's decision should have been introduced, so that no repayments would have been due. We cannot accept that argument. It would be wholly unreasonable for the Government to introduce legislation that imposed a retrospective tax liability which, in the Addis case, would fall on private organisations. The Bill is not retrospective—it freezes expenditure information on the date on which the new policy was announced. That is quite different. The rating provisions in the Local Government Finance Act 1988 and the Bill are strongly similar, in that they operate from the date on which the new policies were announced. I therefore urge hon. Members to oppose the amendment.

Mr. Rooker: Will the Minister tell us how many times the 2·5 per cent. limit has been breached since it was agreed by the House? She has been well briefed, as she knows that the Opposition did not pray against it.

Mrs. Bottomley: I am not in a position to give that information.

Mr. Rooker: It is no good the Minister coming to the House to imply that Opposition parties agreed with the figure of 2·5 per cent., when she has not the information to back up her assertion. We are discussing a substantial sum of money—over £90 million—which will be used to featherbed the water authorities. If the Minister's argument about the 2·5 per cent. limit is valid, will she tell us how many times the limit has been breached, and therefore how many times the Government have had to recompense local authorities?

Mrs. Bottomley: I understand that the provision has been made use of once in Wales and never in England. The hon. Gentleman misses the point. Parliament has already discussed the matter and the 2·5 per cent. threshold was agreed.

Mr. Rooker: We are talking about very different circumstances. I challenge the Minister to give chapter and verse about whether a case similar to the Cakebread case was given as an example by Ministers. It is a case that has overturned the normal rating conventions.
It is ironic that the Minister should talk about Parliament's agreement. The Government guillotined the poll tax Bill, so Parliament did not have a chance to debate this matter then. The date of 10 March was legislated for in the summer. I admit that the announcement was made at the Dispatch Box on 10 March, but by that time the poll tax Bill had completed its Committee stage. The matter was never properly debated in the House. The first opportunity to have a debate on it has come tonight.

Mr. O'Brien: The Minister referred to the normal reduction in rateable values through the demolition of properties or the closure of factories. However, the case that we are presenting is different. The 2·5 per cent.

threshold to which the Minister referred applies to the principle of the general reduction in rates because of changes in the local authority area. The reduction in rates usually comes about because older properties are removed from the valuation list or because certain industries close. We accept that if there is a substantial reduction, an application can be made for compensation under the rate support grant order.
We are not discussing demolished properties being removed from the valuation list. We are discussing properties that are taken out of the valuation list to the benefit of some ratepayers. In this case, the Severn-Trent water authority was one of the greater beneficiaries, but other water authorities throughout the country have also benefited. There is a substantial difference between the principle outlined by the Minister and the case that we are presenting, and I hope that she will accept that. It is abysmal that she should come here, miss the whole point of the argument and bring in other issues that have no bearing on the amendment. The amendment seeks to be fair to the authorities that have suffered because of the two decisions. I hope that the Minister will accept the amendment. If she does not, I hope that other hon. Members will support it.

Question put, That the amendment be made:—

The Committee divided: Ayes 164, Noes 201.

Division No. 470]
[8.19 pm


AYES


Abbott, Ms Diane
Davies, Ron (Caerphilly)


Adams, Allen (Paisley N)
Davis, Terry (B'ham Hodge H'l)


Allen, Graham
Dixon, Don


Archer, Rt Hon Peter
Doran, Frank


Armstrong, Hilary
Duffy, A. E. P.


Banks, Tony (Newham NW)
Eastham, Ken


Barnes, Harry (Derbyshire NE)
Evans, John (St Helens N)


Barnes, Mrs Rosie (Greenwich)
Ewing, Harry (Falkirk E)


Barron, Kevin
Fatchett, Derek


Beckett, Margaret
Faulds, Andrew


Bell, Stuart
Fearn, Ronald


Benn, Rt Hon Tony
Field, Frank (Birkenhead)


Bennett, A. F. (D'nt'n &amp; R'dish)
Fields, Terry (L'pool B G'n)


Bermingham, Gerald
Fisher, Mark


Bidwell, Sydney
Flannery, Martin


Blair, Tony
Flynn, Paul


Boateng, Paul
Foot, Rt Hon Michael


Boyes, Roland
Foster, Derek


Bradley, Keith
Fraser, John


Bray, Dr Jeremy
Galbraith, Sam


Brown, Gordon (D'mline E)
Galloway, George


Brown, Nicholas (Newcastle E)
Garrett, John (Norwich South)


Brown, Ron (Edinburgh Leith)
Gilbert, Rt Hon Dr John


Buchan, Norman
Godman, Dr Norman A.


Buckley, George J.
Gordon, Mildred


Caborn, Richard
Grant, Bernie (Tottenham)


Callaghan, Jim
Griffiths, Nigel (Edinburgh S)


Campbell, Menzies (Fife NE)
Griffiths, Win (Bridgend)


Campbell, Ron (Blyth Valley)
Hardy, Peter


Campbell-Savours, D. N.
Hattersley, Rt Hon Roy


Clark, Dr David (S Shields)
Heffer, Eric S.


Clay, Bob
Henderson, Doug


Clelland, David
Hinchliffe, David


Clwyd, Mrs Ann
Hogg, N. (C'nauld &amp; Kilsyth)


Cohen, Harry
Home Robertson, John


Coleman, Donald
Howarth, George (Knowsley N)


Cook, Frank (Stockton N)
Hughes, John (Coventry NE)


Cook, Robin (Livingston)
Hughes, Robert (Aberdeen N)


Corbett, Robin
Hughes, Roy (Newport E)


Cox, Tom
Hughes, Sean (Knowsley S)


Crowther, Stan
Illsley, Eric


Cryer, Bob
Janner, Greville


Cunliffe, Lawrence
John, Brynmor


Cunningham, Dr John
Jones, Barry (Alyn &amp; Deeside)


Davies, Rt Hon Denzil (Llanelli)
Jones, Martyn (Clwyd S W)






Kirkhope, Timothy
Redmond, Martin


Leadbitter, Ted
Richardson, Jo


Leighton, Ron
Roberts, Allan (Bootle)


Lestor, Joan (Eccles)
Robinson, Geoffrey


Lewis, Terry
Rogers, Allan


Litherland, Robert
Rooker, Jeff


Livingstone, Ken
Ross, Ernie (Dundee W)


Lofthouse, Geoffrey
Rowlands, Ted


Loyden, Eddie
Sedgemore, Brian


McAvoy, Thomas
Sheerman, Barry


McCartney, Ian
Sheldon, Rt Hon Robert


McKelvey, William
Shore, Rt Hon Peter


McLeish, Henry
Short, Clare


McNamara, Kevin
Skinner, Dennis


Madden, Max
Smith, Andrew (Oxford E)


Mahon, Mrs Alice
Snape, Peter


Marek, Dr John
Soley, Clive


Marshall, Jim (Leicester S)
Steel, Rt Hon David


Martlew, Eric
Steinberg, Gerry


Meale, Alan
Stott, Roger


Michael, Alun
Straw, Jack


Michie, Bill (Sheffield Heeley)
Taylor, Matthew (Truro)


Mitchell, Austin (G't Grimsby)
Thompson, Jack (Wansbeck)


Morgan, Rhodri
Turner, Dennis


Morley, Elliott
Wall, Pat


Mowlam, Marjorie
Walley, Joan


Murphy, Paul
Warden, Gareth (Gower)


Nellist, Dave
Wareing, Robert N.


Oakes, Rt Hon Gordon
Welsh, Michael (Doncaster N)


O'Brien, William
Williams, Rt Hon Alan


O'Neill, Martin
Williams, Alan W. (Carm'then)


Orme, Rt Hon Stanley
Wilson, Brian


Patchett, Terry
Winnick, David


Pike, Peter L.
Wise, Mrs Audrey


Powell, Ray (Ogmore)
Worthington, Tony


Prescott, John



Primarolo, Dawn
Tellers for the Ayes:


Quin, Ms Joyce
Mr. Frank Haynes and


Randall, Stuart
Mrs Llin Golding.




NOES


Aitken, Jonathan
Clark, Dr Michael (Rochford)


Alexander, Richard
Clark, Sir W. (Croydon S)


Amess, David
Colvin, Michael


Amos, Alan
Coombs, Anthony (Wyre F'rest)


Arnold, Tom (Hazel Grove)
Coombs, Simon (Swindon)


Ashby, David
Cope, Rt Hon John


Aspinwall, Jack
Cran, James


Atkins, Robert
Currie, Mrs Edwina


Baker, Nicholas (Dorset N)
Curry, David


Baldry, Tony
Davis, David (Boothferry)


Banks, Robert (Harrogate)
Day, Stephen


Batiste, Spencer
Devlin, Tim


Beaumont-Dark, Anthony
Dorrell, Stephen


Bendall, Vivian
Dover, Den


Bennett, Nicholas (Pembroke)
Dunn, Bob


Benyon, W.
Durant, Tony


Bevan, David Gilroy
Dykes, Hugh


Blackburn, Dr John G.
Emery, Sir Peter


Blaker, Rt Hon Sir Peter
Evennett, David


Bonsor, Sir Nicholas
Fairbairn, Sir Nicholas


Boswell, Tim
Favell, Tony


Bottomley, Mrs Virginia
Fenner, Dame Peggy


Bowden, Gerald (Dulwich)
Field, Barry (Isle of Wight)


Bowis, John
Finsberg, Sir Geoffrey


Boyson, Rt Hon Dr Sir Rhodes
Fishburn, John Dudley


Brazier, Julian
Forman, Nigel


Bright, Graham
Forsyth, Michael (Stirling)


Brown, Michael (Brigg &amp; CI't's)
Forth, Eric


Bruce, Ian (Dorset South)
Franks, Cecil


Budgen, Nicholas
Freeman, Roger


Burns, Simon
Fry, Peter


Butcher, John
Gale, Roger


Butler, Chris
Gardiner, George


Butterfill, John
Garel-Jones, Tristan


Carlisle, Kenneth (Lincoln)
Gill, Christopher


Carrington, Matthew
Glyn, Dr Alan


Cash, William
Goodhart, Sir Philip


Chope, Christopher
Goodson-Wickes, Dr Charles


Clark, Hon Alan (Plym'th S'n)
Gorman, Mrs Teresa





Gow, Ian
Marshall, John (Hendon S)


Grant, Sir Anthony (CambsSW)
Martin, David (Portsmouth S)


Greenway, Harry (Ealing N)
Maude, Hon Francis


Greenway, John (Ryedale)
Mayhew, Rt Hon Sir Patrick


Gregory, Conal
Meyer, Sir Anthony


Griffiths, Peter (Portsmouth N)
Miller, Sir Hal


Grist, Ian
Mills, Iain


Ground, Patrick
Mitchell, Andrew (Gedling)


Grylls, Michael
Mitchell, David (Hants NW)


Gummer, Rt Hon John Selwyn
Moate, Roger


Hamilton, Neil (Tatton)
Montgomery, Sir Fergus


Hampson, Dr Keith
Moore, Rt Hon John


Hanley, Jeremy
Moss, Malcolm


Hargreaves, A. (B'ham H'll Gr')
Mudd, David


Hargreaves, Ken (Hyndburn)
Neale, Gerrard


Harris, David
Neubert, Michael


Haselhurst, Alan
Nicholson, David (Taunton)


Hayes, Jerry
Onslow, Rt Hon Cranley


Hayward, Robert
Paice, James


Heathcoat-Amory, David
Patnick, Irvine


Heddle, John
Pattie, Rt Hon Sir Geoffrey


Hicks, Robert (Cornwall SE)
Pawsey, James


Higgins, Rt Hon Terence L.
Peacock, Mrs Elizabeth


Hogg, Hon Douglas (Gr'th'm)
Porter, Barry (Wirral S)


Hordern, Sir Peter
Porter, David (Waveney)


Howard, Michael
Portillo, Michael


Howarth, G. (Cannock &amp; B'wd)
Powell, William (Corby)


Howell, Ralph (North Norfolk)
Raffan, Keith


Hughes, Robert G. (Harrow W)
Raison, Rt Hon Timothy


Hunt, David (Wirral W)
Ridsdale, Sir Julian


Hunt, John (Ravensbourne)
Roe, Mrs Marion


Hunter, Andrew
Rowe, Andrew


Irvine, Michael
Rumbold, Mrs Angela


Irving, Charles
Sackville, Hon Tom


Jack, Michael
Shaw, David (Dover)


Janman, Tim
Shaw, Sir Michael (Scarb')


Johnson Smith, Sir Geoffrey
Shelton, William (Streatham)


Jones, Robert B (Herts W)
Shephard, Mrs G. (Norfolk SW)


Jopling, Rt Hon Michael
Shepherd, Colin (Hereford)


Kellett-Bowman, Dame Elaine
Shepherd, Richard (Aldridge)


Key, Robert
Shersby, Michael


Knapman, Roger
Sims, Roger


Knight, Dame Jill (Edgbaston)
Skeet, Sir Trevor


Knox, David
Speed, Keith


Lang, Ian
Spicer, Michael (S Worcs)


Lawrence, Ivan
Stern, Michael


Lee, John (Pendle)
Stewart, Andy (Sherwood)


Leigh, Edward (Gainsbor'gh)
Stokes, Sir John


Lennox-Boyd, Hon Mark
Stradling Thomas, Sir John


Lloyd, Sir Ian (Havant)
Taylor, Ian (Esher)


Lloyd, Peter (Fareham)
Thornton, Malcolm


Lord, Michael
Thurnham, Peter


McCrindle, Robert
Vaughan, Sir Gerard


Macfarlane, Sir Neil
Waddington, Rt Hon David


MacGregor, Rt Hon John
Waller, Gary


MacKay, Andrew (E Berkshire)
Wheeler, John


Maclean, David
Widdecombe, Ann


McLoughlin, Patrick
Winterton, Mrs Ann


McNair-Wilson, Sir Michael
Wolfson, Mark


McNair-Wilson, P. (New Forest)



Madel, David
Tellers for the Noes:


Malins, Humfrey
Mr. John M. Taylor and


Mans, Keith
Mr. Michael Fallon.


Marlow, Tony

Question accordingly negatived.

Mr. Bob Cryer: I beg to move amendment No. 16, in page 1, line 20, at end, insert—
'(d) assessing the needs of Metropolitan Districts in the light of increasing school rolls, number of temporary classrooms in use, unemployment levels, social security recipients, age of public building and housing stock, condition of roads, railway facilities and any other relevant factors to enable him to increase the payments of domestic rate relief grant and block grant.'.
I should like to make a few brief remarks about each item in the amendment to explain why I believe that the Committee should support the amendment. As Bradford


is a metropolitan district council, I propose to concentrate on that city, although my remarks apply to all metropolitan district councils.
Many of the areas about which we are concerned, such as Bradford, are older industrial cities. Bradford has a number of specific problems, one of which is increasing school rolls. It is virtually unique among the major cities of our country in that its secondary school rolls are expanding. That fact should be taken into account when considering rate support or block grant.
About 500 temporary classrooms are in use in the Bradford metropolitan district and part of the allocation for the replacement of those classrooms by permanent extensions to our schools is being used to repair the temporary classrooms which need major repairs because they have been empty for so long. That is patently absurd and, contrary to what the Tories keep telling us, is not value for money. The Minister should take into account the fact that such cities as Bradford face that great problem.
A third of our schools were built before 1903. A large proportion of those older schools are often very well designed. I am not suggesting that they should all be bulldozed immediately to be replaced by modern buildings, but there is a special problem in maintaining and modernising some of Bradford's school buildings.

Dame Elaine Kellett-Bowman: I am glad that the hon. Gentleman implied that there was not necessarily any disadvantage in the design of those older schools. Is he aware that, in my constituency, there are several super schools over 300 years old which will last a great deal longer than much of the rubbish put up in the 1940s, 1950s and 1960s?

Mr. Cryer: I am sure that the hon. Lady has many happy memories of some of those schools being opened and that she will be willing to make out her own case when her turn comes.
One of Bradford's problems is that we now have a Conservative majority which is getting in on the mayor's casting vote. Most people consider that to be a form of cheating.

Dame Elaine Kellett-Bowman: Rubbish.

Mr. Cryer: The Conservative majority in Bradford recently made a number of decisions that will make the position much worse. In the previous debate, it was suggested that the Tories were saving a little money by dismissing an employee to promote peace. The Tories propose to save £1·5 million a year by raising the price of school meals to 80p a day; £250,000 a year by cutting the number of caretakers and cleaning staff, which will make the building problem worse; £100,000 by scrapping the community education budget; and £125,000 by trimming furniture repairs and replacements. They propose to replace absent teachers with temporary staff only after at least three days' absence and to abolish a fund to help hard-pressed inner-city schools, in direct contravention of the Prime Minister's stated aims. In addition, they propose to save £228,000 a year by dismissing 13 advisory teachers and 43 jobs will remain vacant to save wages and equipment funds. Further measures include withdrawing support for creches at Shipley and Keighley colleges.
Those are major attacks on education in Bradford and it behoves the Minister to accept my amendment so that he can make some compensation for those vicious attacks put through on the mayor's casting vote in what the majority of Bradford citizens see as a straightforward means of cheating.
One of the other problems affecting Bradford is the level of unemployment. Over 22,000 people in Bradford metropolitan district are unemployed at present and there are 1,700 vacancies. The Tory-controlled council is proposing to cut the equivalent of 9,000 jobs at a time when there is a deficit of over 20,000 jobs. It is proposing to throw the equivalent of 9,000 people in full and part-time jobs on to the dole. That is outrageous and that is why I included the issue of unemployment in the amendment.
The level of unemployment in Bradford is well above the national average. When unemployment pay runs out, people receive social security benefits. The number of people in Bradford receiving benefits will therefore increase and the Minister should also take that factor into account.
The Tories in Bradford also propose callously, coldly and viciously to sell off 15 old people's homes. Elderly people who have spent their lives working for the community are to be sold off like so many chattels or items on an accountant's balance sheet. At the council meeting on 25 October, a Tory councillor said:
If you do not grasp the nettle of these crumbling homes for the elderly, then I think it's shameful.
I invite the Minister to grasp that nettle by enabling the condition of public buildings, including old people's homes, to be taken into account in assessing the grant requirements of cities such as Bradford.

Mr. Dennis Skinner: Is my hon. Friend aware that a few days after that decision was taken on the casting vote of the mayor there was a remarkable spin-off in a Nottingham by-election? When the story of the Tory decision in Bradford was told, the result was to turn a Tory majority of 400 into a Labour majority of 600. We must continue to put that message across, as my hon. Friend and others are doing in the Chamber, so as to alert the electorate in every town and city. Does my hon. Friend agree that Nottingham was a very good start?

Mr. Cryer: I am grateful to my hon. Friend for drawing attention to that. Here is an opportunity for the Government to state that there are criteria other than the whims of a tiny, extreme Right-wing clique on Bradford council. I am sure that the Government have noted the election result in Nottingham. There is no doubt in my mind or, I am sure, in the minds of my hon. Friends that if the Tories had revealed their dstardly plans to sell off old people's homes and sack 9,000 people we would have held Odsal with a vast majority.

Dame Elaine Kellett-Bowman: The hon. Member for Bolsover (Mr. Skinner) is out of date because on Thursday the Conservatives won a seat on Hyndburn district council, bringing us very near to getting control.

Mr. Cryer: The amendment concerns metropolitan districts, of which Hyndburn is not one, so the parallel cited by my hon. Friend the Member for Bolsover (Mr. Skinner) is far more accurate than any other example given so far.

Mrs. Alice Mahon: Is my hon. Friend aware that within two or three days of the change of control in Bradford the Tories in Halifax were bragging that if they had taken control in May they would have been prepared to close old people's homes? Does my hon. Friend agree that this may be part of a Tory plan for wholesale privatisation of old people's homes wherever they gain control?

Mr. Cryer: It is clearly implicit in the Bradford policy. Many Tories, including members of the Government, are saying that that is the kind of policy that local authorities should adopt, with callous disregard of old people's wishes.

Mrs. Teresa Gorman: rose—

Mr. Cryer: I will give way to the hon. Member for ticket touts in a moment.
A survey which I understand was commissioned by the local authority from Market and Opinion Research International showed that elderly people did not wish to be sold off. The so far unpublished poll of 138 elderly people showed that more were worried about being sold off than took the matter calmly and that there were high levels of satisfaction with all aspects of the local authority homes. The Minister may argue that old people's homes can be sold off and thus need not be taken into account for grant, but that survey invalidates that view. I know that the Minister supports balloting, as he voted for legislation requiring trade unions to engage in balloting until it comes out of their ears—although not, of course, at GCHQ, as today's splendid demonstrations showed. That survey by MORI, unpublished but handed to the local authority, shows clearly that old people do not want to be sold off.

Mrs. Gorman: It is always stimulating to be given a rub-down by the thinking woman's version of a Brillo pad. The hon. Gentleman may be interested to know that I have had a word with the leader of the Conservatives on Bradford council on the subject of the old people's homes. It seems that under the long-term Labour administration the homes had become very rundown. The people now running Bradford are quite sensibly bringing in the private sector to do a better job for the old people with, one hopes, better conditions and better value for money. There is no question of the homes being closed down, so the hon. Gentleman is misleading the Committee.

Mr. Cryer: I intend to press my amendment on the basis that the Minister should take into account the condition of public buildings such as those old people's homes. The hon. Lady could not have raised the matter at a more opportune time, as I have here a secret internal memorandum from Bradford recommending:
It should also be a condition of the sale that specific essential repairs be carried out in appropriate cases in addition to the alterations that will be necessary for each home to provide the acceptable ratio of single occupancy bedrooms required for private registration.
That is a recommendation to the director of social services that money should be spent on the homes before they are put up for sale.

Mr. Patnick: Will the hon. Gentleman giveway?

Mr. Cryer: I should like to finish this point.
Moreover, there is a suggestion that the homes could be put up for sale illegally because it is proposed that there should be a restrictive covenant to ensure that they are run in a particular way. The recommendation states:
You will note from the reports that in most cases that the proposal to sell the properties with the restriction on future use the expected purchase prices are less than an expected purchase price on an unrestricted sale, substantially less in some instances. It is therefore clear that the proposed disposals whether sold individually or as one sale could well be in breach of Section 123 of the Local Government Act 1972. This Act provides that an Authority must not, without the consent of the Secretary of State, dispose of land for a consideration less than the best that can reasonably be obtained.
It suggests that the local authority is trying to sell off the homes at a cut price and thus to evade the provisions of the 1972 Act, and it rather suggests that the enterprise culture is indeed the corrupt culture that many of us believe it to be.
The other cruel section of the memorandum—it is merely advice given to the local authority, but it is restricted because it is not the kind of thing that the Tories would want to become public—suggests:
It may be worth considering as an alternative that two or three of the homes only be sold as 'going concerns' to test the market.
The proposal is that old people should be made to suffer in the evening of their lives so as to test the market to see where the wretched Tories can raise some more money.
I do not believe that the Minister shares that cold, calculating view. I hope, therefore, that in his reply today he will express some sympathy for the view that money should be available to take into account the age of public buildings so that money can be spent to satisfy those old people who were virtually balloted through MORI, their wish to stay in those homes can be met and money can be made available from central Government for repairs and rehabilitation.
Another of the criteria is the housing stock, which in Bradford is mostly intended for the elderly. Few new houses have been built. because of Government restrictions. Phase three of a development on a major estate in my constituency has been frozen. There are problems with the so-called Boot houses, which are prefabricated homes built in the 1930s that have developed faults and are expensive to repair—

Mr. Skinner: Were they built by private enterprise?

Mr. Cryer: Yes, they were built by Henry Boot. The local authority is picking up the bill for houses that, in later years, have proved to be faulty. The Minister should take that into account. The faults of private enterprise are being visited upon the tenants or, in some cases, the purchasers and the tab is being picked up by the local authority.
I am sorry that the hon. Member for Keighley (Mr. Waller) is not present this evening—

Mr. Skinner: The hon. Member for Keighley (Mr. Waller) is probably trying to sort himself out. When we recently voted on a Lords amendment relating to dental and eye check charges, he voted with the Opposition the first time but, strangely, did not do so on the second occasion.

The Temporary Chairman (Mr. Nicholas Winterton): Order. Interventions must be relevant.

Mr. Cryer: I take my hon. Friend's point. The hon. Member for Keighley is the only one of the five Members concerned who is not here this evening. All the Labour Members are present.
In the rush towards privatisation we should remember that in 1971 the Keighley Tories privatised the council's housing maintenance department and handed it to two private contractors. That maintenance was so bad, and so little was done because the money had gone into the pockets of those contractors, that under local government reorganisation in 1974 the Bradford Tories had to establish a new direct works department. They had to spend more money in Keighley than in any other area in Bradford metropolitan district to remedy the damage done. That must be taken into account when assessing grant for Keighley.
Another of the criteria listed in the amendment relates to roads, although I do not wish to comment in detail on that. The Telegraph and Argus last year ran a campaign about the poor condition of roads. An area called Queensberry, which has produced the famous Black Dyke Mills band—the glamorous side of Queensberry—has had its expenditure on private street works frozen. Roads in some parts are like medieval quagmires. In today's society it is wrong that there are no decent roads to service decent, sturdy, terraced houses. The Government should provide grant for the carrying out of those street works.
Railway facilities are also mentioned in the amendment. At Low More in my constituency the proposed station is low on the list of priorities. The Minister should take that into account because such a station would be a boon to my constituents who have to suffer a poor bus service—which has become very much worse since the legislation introduced by the then Secretary of State for Transport, now the Secretary of State for the Environment. I note that the right hon. Gentleman is sitting shyly in a corner of the Chamber. His transport legislation was bad, as is his environment legislation. Both are so terrible that it is difficult to judge between the two. It would help Bradford if the Minister bore in mind the fact that there are two separate stations and that it would be useful to link the two. If that was done Bradford would be placed on the railway map.
The Tory council in Bradford was elected on the strength of a by-election when people were not given the relevant information. They were deceived. The Tories lied about their plans and denied that they would embark on any cuts. The Tory candidate's election address did not mention that 9,000 people would be made redundant and that there would be cuts in community centres and so on. That council is embarking on savage cuts that will have the greatest impact on the poorest people in Bradford.
In voting for the amendment, hon. Members will vote for an opportunity for central Government finance to overcome the Tories' savage cuts. I invite the hon. Members for Shipley (Sir M. Fox) and for Keighley to vote for the amendment, which would help to rescue some of the buildings and facilities in their constituencies. If the amendment is not carried, the cuts will cripple many families, both directly and indirectly through the provision of such services as education. Any Tories who vote against the amendment will be callously voting to kick the ordinary, hard-working, decent people of Bradford in the teeth.

Mr. Patnick: The hon. Member for Bradford, South (Mr. Cryer) promised to allow me to intervene in his speech, but I now realise that he suffers from galloping amnesia. As my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) reminded us, the hon. Gentleman's description of his metropolitan district is typical of any metropolitan district today. I could make similar arguments for Sheffield: indeed, I did so on Second Reading.
I was taken to task by members of Sheffield council for suggesting that Sheffield could make further savings. Sheffield actually runs the Karl Marx memorial lecture, which was introduced by the hon. Member for Sheffield, Brightside (Mr. Blunkett) at the Sheffield memorial hall on Friday 11 March 1988. The lecture was organised by Sheffield city council's central policy unit, and supported by Sheffield city council's police and community safety panel. The subject was "the state, the police and the inner city" It was the sixth Karl Marx memorial lecture.
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In February 1985, the then leader of Sheffield city council, the hon. Member for Sheffield, Brightside (Mr. Blunkett), in an article in the well-known magazine "Sheffield Today", made the following germane point:
The hardest hit councils, not just the rate capped ones, are asking for the same three things from Central Government:

1. getting rid of the unfair system of financial targets and penalties which eats into council grants
2. restoring the grant to a fair level so that less money has to be found from the rates
3. giving up trying to use the Rates Acts to force councils into cutting jobs and services."

That is the very basis of the legislation before us.
Wages and salaries form at least 68 per cent. to 70 per cent. of the costs of running a council. I listened carefully to the hon. Member for Bradford, South (Mr. Cryer). If there are 9,000 redundancies to be made in Bradford, it would bankrupt the council. It would not have the cash to fund such redundancies. Nowhere at all can it find money for redundancy payments to 9,000 members of staff, be they full-time, part-time, or whatever. It cannot do it. It is one of the myths that the hon. Member for Bradford, South has repeated many times in the House. From all the hon. Members for Bradford we have heard the greatest crop of misinformation that has ever been placed before the House. We should tell the truth, the whole truth, and nothing but the truth. We should not hear about the way in which Opposition Members see the matter from their political stance. We should deal with it on a factual basis, and I did so. I went to see Eric Pickles, and I said to him, "With 9,000 staff and all these things you are doing, how, where and why?"
I shall give the proper story from Bradford. It is a load of rubbish that it is getting rid of many staff. One hundred and fifty staff are due to be redeployed, and that works out at a cost of £1·8 million. What did Bradford decide to do? It has freed managers to work without political interference. It removed the Left-wing trappings from standing orders. It protects the right of minority political groups and promotes open government. It has changed standing orders to reduce the size and number of committees. It has reduced committee places from 460 to 180. It has reorganised the priorities and duties of committees. It has abolished Left-wing talking shops and other things. It has introduced committees to oversee competitive tendering in all departments. It has brought


in, as Sheffield had to bring in, cash-limit budgets. It has reorganised conduct and voting at council meetings in a more effective way. Savings of £6 million were needed to be approved on 25 October. Savings of £5·8 million this year and £8 million next year will prevent the council from re-rate-capping.
What about other councils? What about Wakefield? Nobody has mentioned the £20 million—

Mr. Max Madden: Before the hon. Gentleman moves from Bradford to Wakefield, if Bradford council does not plan to dismiss 9,000 men and women over the next five years—2,500 full-time jobs—will he explain why the amendment, which he and several of his Conservative colleagues sponsor, refers precisely to 2,500 fewer jobs in Bradford?

Mr. Patnick: I am obliged to the hon. Gentleman for his intervention. All will be revealed as I make my speech in my way, not in the way in which he wishes it to be made.
Already, savings of £11 million have been made in Wakefield. Sheffield has £20 million to cut from its budget, and Brent has a £17 million decrease. Hon. Members have heard a lot about benefit shops. Three were closed because they duplicated the work of social services who employed staff and a mobile advice centre. The council is moving them into one-step shops, which will enable ratepayers to go into shops and receive information. There are no education cuts. Therefore, the cost of meals is going up to 80p. Had the cost of meals gone up by 5p a year between 1984 and 1988, they would now be at 80p—the very price they are to be. According to CIPFA, Bradford recovers 21 per cent. of meal costs through revenue, while the cost of meals in Calderdale, Kirklees, Leeds and Wakefield is 10 per cent. higher than in Bradford, and one third of all meals are free. Thirty-seven per cent. of schoolchildren do not pay for any increase. In Calderdale, Kirklees, Wakefield and Leeds, the average is 22 per cent.
Brent, when faced with that problem, sacked 230 teachers, reduced teachers' salaries by £2 million, sliced discretionary awards to students, and tried to abolish school meals and nursery education, but it was unsuccessful.
I have heard quite a lot from the hon. Member for Bradford, South about the lord mayor of Bradford. There were no elections to be held during the next year, so it was decided, as the Conservatives had the majority, to use the lord mayor's casting vote. As I have explained, that is a trick or ploy that Sheffield has used for many a year. Only Socialists can ever be lord mayor of Sheffield: that is the way the cookie crumbles. But when Conservatives do it, suddenly it is all wrong.
An injection of cash is needed to bring the old people's homes up to standard. The social services directorate admitted the shocking statistic that nine of the 13 homes would fail to be registered if they were in the private sector. The council must ensure the proper care of the district's elderly people, but it is abundantly clear that it has not the resources to provide suitable facilities of its own. A feasibility study showed that, if the homes were transferred to the private sector, the Department of Social Security would provide full income support for 68 per cent. of the residents and slightly reduced income support for 19 per cent. For only 13 per cent. would no income support be

provided. If all the homes were transferred, the ratepayers of Bradford would save £2·3 million a year in revenue costs. Those would be capital savings.

Mrs. Mahon: Will the hon. Gentleman give way?

Hon. Members: Give way.

Mr. Patnick: Hon. Members must not start lecturing me about etiquette and giving way. When I asked the hon. Member for Bradford, South (Mr. Cryer) to give way, he promised that he would, but carried on making his speech.
Some £10 million in capital costs will be needed to bring the homes up to a proper standard. The £2·3 million savings would finance a new team of inspectors. The eight new staff appointed will register and inspect private homes throughout the district and ensure that they meet the high standards set by the council. It is clear that, if the homes are transferred, the care of the elderly will be improved. The social services directorate said that nine of the 13 buildings were virtually unfit for human habitation and would never be improved by the council.

Mrs. Gorman: Does my hon. Friend agree that the homes were in danger of deteriorating into the kind of condition that was allowed to prevail in the Nye Bevan home run by a Socialist London council? Their state was so disgraceful that they had to be closed down by outside intervention. Does my hon. Friend agree that if the council had remained under Labour control the same would have happened in Bradford?

Mr. Patnick: I thank my hon. Friend for her intervention. It is clear that if the homes are not transferred they will deteriorate. As it is, the council has additional resources to monitor carefully the quality of care offered by the private sector. The transfer would guarantee a proper level of capital investment, while day-to-day care is as good as, or better than, that offered in the public sector. In Sheffield, homes were closed because they were claimed to be "not suitable" for the care of the elderly.
Houses have not gone into disrepair since the Tory Government came in in 1979. Council after council has allowed its housing stock to deteriorate. We have a responsibility because it was decided to replace with tower and point blocks and high-density housing, nearly all of it concrete, the smaller terrace-type houses that could be converted and improved at reasonable cost.
The hon. Member for Bradford, South mentioned Reema building such houses, but Sheffield city council built houses that had mould growing on the inside, and they have all had to be knocked down. It cannot be claimed that just one contracting company built such houses. The decision to build houses on a mass scale was a curse of the society in which we lived at the time. The Bradford Tory group on the council decided to increase rents by £3 from late November and to reconsider the housing revenue account at Budget time. The Labour group rents for the three years from 1983 to 1985 were such that if the matter were not so serious it would be laughable.

The Temporary Chairman: Order. I am listening carefully to the debate and I have allowed frequent references to Bradford, but I hope that hon. Members participating in the debate will relate their remarks to the


terms of amendment No. 16, not purely to Bradford. The amendment is much wider than just the metropolitan district of Bradford.

Mr. Patnick: I am obliged to you, Mr. Winterton, for putting me back on the right road. I am referring to the needs of metropolitan district councils and the deterioration in the housing stock. What applies to Bradford also applies to Sheffield and most of the housing stock throughout the country. It is a fact that some major refurbishment is taking place with the housing action areas and the estate projects, and that the deterioration in the housing stock did not start to happen in 1979.
All authorities have a bureaucratic nature. They have central services, personnel, architects, accounting, computing and a chief executive's office. All this work has been duplicated and duplicated, and the new committee structures need to be mirrored elsewhere.
The hon. Member for Bradford, South was allowed to make his speech virtually about Bradford alone, but I appreciate my position. Nevertheless, to return to Bradford, I disagree with Opposition Members that the situation in Bradford is so different from that, were there a change in control of another local authority. I do not accept that all the ills of local government started in 1979 with the election of a Conservative Government. I do not accept that all the houses, the schools and public buildings have deteriorated since 1979.
I accept that for a long time we have needed a change in local government funding. I accept that anyone who uses council services should contribute to them both through the tax system and through the rating system. I do not accept some Labour Members' argument that the community charge is a poll tax. That is the argument of people who wish not to vote, but they can decide if and when they pay their community charge whether to go into the polling booth. The law does not insist that one votes. In Sheffield only 24 per cent. of the electorate bothered to vote. It is a fact that if people pay a community charge, more people vote.
I cannot accept the amendment or the hon. Gentleman's claim that his constituency is unique in that the Conservatives have taken control. Otherwise, Bradford would have been a rate-capped city. Sheffield was rate-capped and has not been since. It is up to the local authority to pull itself back into the 20th century and then to go forward as the Bradford Tories have done.

Mr. Pat Wall: In recent years cuts in rate support grant from about 60 per cent. to 40 per cent. have placed enormous strains on local authorities, and the amendment in the names of my hon. Friends the Members for Bradford, South (Mr. Cryer) and for Bradford, West (Mr. Madden) deals with the relationship between rate support grant and the social problems of urban areas, especially the historic problems of neglect and aging over more than a century.
Government policy has meant that the more local authorities spend above GRE, the more they lose. Conversely, the greater the deficiency on GRE, the more grant aid they receive. Since 1979, we have had 20 Acts to reduce the powers of local authorities. That legislation has severely affected many local authorities. First, we had a

system of targets. That system was unfair to many authorities. In the end, the Government recognised that and modified it so that local authorities were judged on their historical spending patterns. Most authorities received sums equal to the figures that they had already produced or a little above. Then we had the added complication of the so-called multiplier.
Bradford, Birmingham, Sunderland, Cleveland and an authority in Derbyshire suffered extreme losses although they have never been rate-capped or gone above GRE. The figure for Bradford for the past three years is £38 million, or a rate of 87p in the pound, and the average cost has been £110 per ratepayer. That sort of expenditure has not been repeated in many other authorities, even including Leeds—our immediate neighbour, and a city of similar size. That shows the high cost of Toryism to the ratepayers of Bradford.
About two years ago, the Government began to retreat and tried to recognise the social needs of cities and inner urban areas such as Bradford, but their wishes were overturned by the revolt of their friends in the Tory shire counties, who demanded that grants be made per head of population, not on the basis of social need. That ideal was enshrined in the Local Government Act 1988, which created the so-called community charge.
Bradford has serious problems, with one quarter of men and three fifths of women officially recognised as low-paid, one third of families on some form of state benefit and 60,000 people in receipt of the old supplementary benefit alone.
As my hon. Friend the Member for Bradford, South said, one third of our schools were built before 1903. I understand that tomorrow Dixon's will announce that it has negotiated with Bradford city council to build a city technology college in the city. It will donate about £1 million from its charity fund, which will be matched by Government expenditure of between £4 million and £10 million. Education in Bradford will be cut by £3,370,000 this year and by about £3·5 million the following year. Bradford does not need £4 million to £10 million of Government expenditure on a college for a tiny section of the community. It needs an effort to restore the cuts that are proposed by the Conservative council and to make good the years of neglect in our inner city. Newcastle, Liverpool, Manchester, Birmingham, Glasgow and the older industrial cities have suffered similarly.

Mr. Cryer: Does my hon. Friend accept that the amount of money that will come from the public purse for this CTC in Bradford is the equivalent of all the money that will go on capital expenditure for the whole of the public sector in the Bradford metropolitan area? Is it not a scandal that that should be permitted under this Tory Government?

Mr. Wall: To bring the schools in Bradford up to a modern standard requires the expenditure of £10 million a year over the next 10 years, and our allocation for school building and renovation is only £6 million a year. Our position will not be different from that of other cities.
The hon. Member for Sheffield, Hallam (Mr. Patnick) mentioned housing starts. Again, our city is not unusual; its housing starts fell from 2,200 in 1978–79 to only 800 in 1986–87—a fall of 64 per cent. At the same time, the Government have forced local authorities to sell their best houses, but have restricted their ability to reinvest those


proceeds in house building. That has led to a reduction of one third in the stock of council houses in that period—in a city with a housing waiting list of more than 8,000 people.
Bradford's backlog of repairs will cost some £130 million, which is more than 10 years of our total housing grant. However, the Conservative council intends to cut expenditure on housing and the environment by £43,000 this year, including, in a spiteful move, £7,500 which was originally intended for emergency accommodation for the homeless. I raised with the Prime Minister in the House the matter of a young man of 17 who was forced to live in a rubbish skip overnight.
It is not just council tenants who suffer. The number made homeless through mortgage default or rent arrears has trebled in Bradford during the past five years. Bradford, like other cities, has real social problems that the Government penalties have created and which have led to a crisis in many urban areas. The relevance for Bradford is that unlike most urban areas, we now have a Conservative majority and, if the reactionary proposals of the council are carried through, it will be on the basis of a wild west scenario of two-vote Smith Midgeley, who has more in common with the sheriff of a wild west town, such as Dodge City, than with the mayor of a hard-working west riding city.
If I may use the western analogy again, the hon. Member for Hallam bored us with an inordinate speech on Brent last Monday, despite the fact that he was a city councillor in the city of Sheffield. Having travelled from Sheffield to Brent, he has now moved this week to the city of Bradford, and he reminds me of the motto of the old western hero, "Have gun, will travel." In his case, it is "Have local government speech, will travel to any area" where his party may need assistance, because it has a lack of speakers on the subject.
The combination of social problems and the rate support grant has hit inner-city areas, and has hit, too, the Minister's friends in Bradford. I do not think that outsiders realise that there are not just three Labour seats in the city of Bradford; it is a metropolitan district which has five seats, including Keighley and Shipley.

Mr. Madden: Where are those hon. Members?

Mr. Wall: They are not here tonight.
I have done a rough calculation without checking the figures in the Library, but in the 1987 general election the Conservatives had a majority of 9,000 votes over the Labour party for the combined five seats and, because of the peculiarities of the way in which the boundaries were drawn and because the addition of Ilkley prevented Keighley from becoming a Labour seat, the metropolitan district is not a typical Labour heartland. However, up to two years ago the council was either Conservative-run or was a hung council that was basically a Conservative council with alliance support. Labour took the council in the first place because of the rate increase of more than 30 per cent. imposed by Bradford council. It was the cut in Government rate support grant and the special cuts of £38 million for Bradford that led to that rate increase and to the defeat of the Conservative council at that time, and the election of a Labour council in the metropolitan district for the first time.
The secret behind what is happening in Bradford, which has national implications, is that we are faced with a

massive auction of public assets to reduce the burden of the poll tax in its first year of introduction. That is no basis for future planning for any local authority and it is no way in which to tackle the enormous social problems that my hon. Friend the Member for Bradford, South and I have outlined today and last Monday.
The Government have a chance to consider the plight of the five towns that lost last year under the terms of the multiplier, which affected the rate support payments. They have the chance to make good that loss during the current year. That does not just go for the £38 million already mentioned. The Minister should help his political friends in Bradford by giving the council the sum of between £4 million and £10 million that will otherwise go to the city's CTC, supposing that Dixon's plans go through. In that way, the cuts of £5 million announced by Bradford council would not have to be made and a burden would be lifted from some of the poorest working-class communities in Bradford. Those people are facing an increase of £1 per week per child for school meals. If a family has three children and has to pay an extra £3 per week, that represents a real cut for a textile worker on low wages and is an infringement of that person's standard of living.
I do not believe that the flint-hearted members of the Government, the Minister's Departmant or the Tories who now run Bradford council will take a humane and reasonable attitude to the special problems that Bradford has suffered over the years. However, I must warn them, even if Bradford metropolitan district is not a traditional Labour area. The Tories tried the same trick with London as they are trying with Bradford. When they were defeated in the old London county council, they redrew the boundaries and formed the Greater London council. They met with defeat there as well. As night follows day the result of the policies introduced in the city of Bradford will mean that, for the first time, there will be a massive Labour majority when we get the next opportunity at the polls. In common with the GLC, that city council will also go Labour, it will remain so and the only way in which the Government will demolish that will be if they abolish the council itself.

Mr. Madden: We are gathered together in the Committee to consider the Rate Support Grants Bill and I shall take as my text an unlikely source—an article written—

The Temporary Chairman: Order. The text that the lion. Gentleman should take for his speech is amendment No. 16.

Mr. Madden: I wholeheartedly support amendment No. 16, which refers to assessing the needs of metropolitan districts in the light of a number of matters. I intend to refer specifically to unemployment levels and social security recipients.
In an article in The House Magazine of 7 November, Councillor Eric Pickles, the leader of the Bradiord Conservative group, said:
Bradford may seem an unlikely place to host a Conservative revolution in local government … People are simply not used to decisive action in local government and the speed with which we are moving has taken them by surprise. It may have taken until 4·30 in the morning, but at the council meeting two weeks ago, we did more to reform Bradford Council in one night than the Labour Group had done in two years of control. The Conservative programme for Bradford council, the first phase of which"—
I stress "the first phase"—
was passed at last month's meeting, has three related parts. Firstly, the management structure of processes within the organisation must change to meet the new environment created by Government legislation. Secondly, the structure and concerns of committees must reflect the priorities of an enabling Council, not a paternalistic bureaucracy. Finally, the extent and character of the services delivered by the Council must be made relevant to the real needs of the people of the district.
Councillor Pickles has great difficulty in identifying real people. In our local media, he has been widely quoted as referring to the people who were extremely concerned about the matters that were steamrollered through at the council meeting, and to which he referred, as not "real people", but members of the Labour party.
Councillor Pickles and the hard-line clique of associates with whom he is now seeking to introduce, by stealth, his hidden agenda, must tell us how the real needs of real people in Bradford are to be met. Who decides? Who sets the criteria? As my hon. Friend the Member for Bradford, North (Mr. Wall) said, for a new city technology college to be announced tomorrow in Bradford is surprising news indeed because I do not believe that such a college represents the most overwhelming need of real people in the city of Bradford at present. An enormous amount of public subsidy will be put into building a new college in my constituency, on land that was previously devoted to housing. We have enormous housing needs and, as my hon. Friends the Members for Bradford, South (Mr. Cryer) and for Bradford, North have said, we have an education crisis and are trying to improve the education service and the fabric of our established schools, so we need a city technology college like a hole in the head.
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If the college comes about—I have grave doubts that it will—inevitably it will do great damage to upper schools in Bradford and to Bradford and Ilkley community college, the largest in Britain. It will cream off the ablest young pupils from upper schools and the ablest staff from existing institutions. It will do great damage to our education, which is already in considerable difficulty.
If there are large sums of money available from the private sector, I believe that it should be put into existing schools, many of which are facing great difficulties because of shortages of equipment and books and which lack other basic amenities. If the Government are willing to put into Bradford about £4 million or £6 million, the major priority must be improving our education service, and improving Bradford college, not building a shiny new college which, if it is built, will become known as Kenneth Baker's folly. I strongly urge the Government to have considerable second thoughts about the wisdom of proceeding with a city technology college in Bradford.
In Bradford there are many unemployed people and people on low incomes, who need to know where they can get help. They need information. I should like to confine my remarks to my concern and that of many others in Bradford about the decision of the new Bradford Tory council to close our benefit advice shops—unlike the hon. Member for Sheffield, Hallam (Mr. Patnick), who seems to have been imported into the debate in the absence of his hon. Friends the Members for Shipley (Sir M. Fox) and for Keighley (Mr. Waller) to speak about Bradford, but who seems to know very little about it. I hope that he knows

more about Sheffield. In recent debates he has given us a gazetteer of all sorts of different places in London and other parts of the country. He should have limited his remarks about Bradford, because they seemed to be singularly uninformed.
The people of Bradford need advice on the benefit help that is available. They need to be given the correct application forms and advice and assistance in completing those forms. If help is refused, they need assistance in making appeals to social security tribunals and other appeal bodies. Many Asian men and women who live in Bradford need particular help across the range of matters that I have mentioned. Bradford Tory council's decision to close the benefit advice shops seems to be at odds with the Government's declared objective to target help where it is most needed. That is crazy and, in my language, it is plain daft.
Thousands of people in Bradford have received advice from the benefit advice shops about the DHSS, about unemployment benefit offices, about housing benefit and much else. More than 60,000 people have received good, accurate, helpful advice from our benefit advice shops over the past three years. That is very relevant to amendment No. 16. I urge the Minister, who the other day did not seem to be aware of Bradford Tory council's plans to withhold funding from Bradford's citizens advice bureaux or to close the benefit advice shops, to investigate the matter urgently. I urge him also to have talks with his colleagues in the DHSS and at the Department of Employment because I believe that this matter is vital. Bradford Tory council should be prevented from closing the benefit advice shops.
The benefit advice shops are seen to give independent advice. That cannot be said of the DHSS, the UBOs or the jobcentres. If the Minister consults the staff of those bodies, they will tell him that the public perceive the DHSS, UBOs and jobcentres as part of the system. The public do not believe that they give independent or impartial advice. Those agencies will tell the Minister that the great value of our housing benefit advice centres is that they are seen to be independent. The difficulty in Bradford is that not only is the Tory council closing the benefit advice shops: it is also threatening to close many independent advice centres organised by voluntary groups in different parts of the local community.
Ministers are obsessed with everything being cost-effective and offering value for money. I hope that the Minister will consider the contribution that the benefit advice shops make towards helping many people in Bradford. Those shops are vital to the local economy. If people are helped to get benefit to which they are entitled, they spend their benefit on local goods and services. That is good value for money.
Regrettably, the social fund has had a devastating effect on people's opportunities to get benefit to which they are entitled. In effect, it has reduced considerably the amount of money spent in our local community on goods and services by poor people and those on low incomes. I hope that the Minister, unlike the hon. Member for Hallam, will recognise that Bradford benefit advice shops do not duplicate services found in the local DHSS offices, in the local UBOs or in jobcentres. The advice shops provide advice which is perceived by the public to be extremely helpful and, most importantly, independent. They are not seen to be part of the establishment or part of the system.
In the context of this amendment, I urge the Minister to ensure that Bradford Tory council is told that it is important for the unemployed, for those on social security and for those who want to get benefit to which they are entitled, that urgent steps are taken to keep the benefit advice shops open.
I recently tabled parliamentary questions to discover the number of bilingual Asian staff in our local DHSS, UBOs and jobcentres. There are five Asian-speaking staff in the three DHSS local offices. None of the claimant advisers in our local UBOs is an Asian bilingual speaker and no such speakers are available in our job centres, each of which has only limited access to Asian interpreters. I again urge the Minister to look at the help that Bradford's benefit advice shops and other independent advice centres give to Asian people seeking information about benefit entitlement and help and information on a range of other matters.
If the Government continue down the road of targeting help on those most in need, they clearly have a responsibility to enable people entitled to help to get it easily. Those people must be able to get proper, accurate and independent advice. That need can be clearly seen in terms of family credit. We are told that the national take-up is only 30 per cent., and I do not think that it is any higher than that in Bradford.
I have raised these matters with the Minister, I think, three times. I ask him to save our benefit advice shops because if they close many Bradford people will lose. Our economy will also lose, and so will the local council. The closure of those shops will result in more rent and rate arrears. If we have to pay the dreadful poll tax, there will be poll tax arrears. There will be more disconnections of gas and electricity and more debts accruing to the electricity and gas boards. On all those matters, independent benefit advice is important.
The Minister seems to be laughing. I hope that he will address his considerable intellect, which has been displayed so often in our debates, to the real problems of people in Bradford. If he does that fairly and objectively, he will conclude, as many people in Bradford concluded long ago, that these benefit advice shops and other independent advice centres should be retained and allowed to continue to give good independent advice to the many men and women in Bradford who seek to use them.

Mrs. Mahon: I should like to address two matters relating to the amendment. One is about elderly social security recipients in residential homes and the second is about deteriorating housing stock. I challenge the statement by the hon. Members for Billericay (Mrs. Gorman) and for Sheffield, Hallam (Mr. Patnick) that it would be better for elderly people to be cared for in private homes. I can speak from some experience because I spent many years caring for elderly people. It is morally unjustifiable to move people around as if they were unit costs and not give them any choice because they are elderly.
I appeal not to the Minister's intellect but to his Christianity and ask him to think before he allows wholesale privatisation of care for elderly people. It has not been proved that it is more cost-effective to keep elderly people in private homes. Taxpayers pay billions of pounds so that some people can make profits from the care of the elderly. If local authorities were given the same

handouts as the private sector, I am sure that local authority homes would not be in the state of disrepair that we have heard about in the debate.
I remind the Minister of a sad tale in Calderdale concerning the Government's foolish policy on the repair of housing stock. In 1982 my metropolitan borough suffered a gale that badly affected some houses on a hillside in Calderdale. We have many hills in Calderdale and these houses were not placed in the most suitable site. The hon. Member for Eastbourne (Mr. Gow) who was then the Minister for Housing and Construction, refused to give us a grant to repair the houses. Some years later, we were exposed to the estate action programme introduced by the Government, and the private sector let us down. We had to pull down 344 houses and flats and that was a scandal when there were 5,000 people on a waiting list.
The Government have now given £364,000 to a private developer to build on this land. The local authority is getting only £112,000 for the land and the private developer is bragging about making £250,000 profit out of the deal, but the ratepayers of Calderdale will be paying between £80,000 and £90,000 in debt charges for 40 years. I challenge any hon. Member to tell me that that is good economic sense. I urge the Minister to take note of the amendment and get some sense into local government finances.

Mrs. Gorman: I had not intended to make a speech, but I wish to correct this point, because we have heard an awful lot about elderly people and homes. Privately owned homes for the elderly, as the hon. Member for Halifax (Mrs. Mahon) knows, are heavily regulated and often visited by inspectors from the public sector, so there is no question of these institutions becoming rundown unless the inspectors are not doing their job properly. It is much more likely that public sector homes become rundown, because the inspectors are often in cahoots with the people running the public sector homes, because they are in the same unions and are all working together for the same council. That is how the Nye Bevan scandal developed. Everyone was covering up for everyone else, and that happens regularly in the public sector.

Mr. Gummer: I shall look at the situation in Bradford as an example, as it is the only example that has been given. In Bradford, the grant entitlement in 1988–89, which is the one no doubt to which hon. Members would like me to apply special arrangements, will be £151·5 million, which is £14 million more than it was in 1987–88.

Mr. Cryer: Not enough.

Mr. Gummer: That is the kind of helpful remark that the hon. Gentleman has been making this evening.
I am obsessed with value for money, because it is value for the taxpayers' and ratepayers' money and the value goes to those who are least able to help themselves. I find the debate upsetting because the reason for the change that Bradford is seeking to bring about is that for some time Bradford has been run at the behest not of the clients of the local authority but of the unions that run certain services. I am not surprised, because the hon. Member for Bradford, West (Mr. Madden) was for some time the assistant campaign manager for the National and Local Government Officers Association, that he made the kind of speech that he did. The Labour party is always


defending what is done by the unions, which take more from the local authorities than they should do and leave less for those who need help and whom the local authority should be helping.
It is surprising that the hon. Member for Bradford, South (Mr. Cryer) made all that fuss about the increase in price for school meals. I did not notice him shouting at the hon. Member for Halifax (Mrs. Mahon) because the Calderdale local authority in her constituency was charging 70p when Bradford was charging 60p. Is Calderdale a disgusting authority? Did I hear a fight about that? A price of 80p is not out of the ordinary. It is not a high price to pay for school meals when a third of those who take them get them free. It seems much better to give the money directly to those who need it.
It was a pity to hear the reactionary views of the hon. Member for Bradford, West about the city technology college. I do not know what the decision about the CTC will be, but I know that the attempt is to give better education in Bradford and to get a good deal of money for it from the private sector. The hon. Gentleman should welcome that. I am ashamed that he has tried to turn that down for his own city.
The hon. Member for Bradford, West should be ashamed of making his disgraceful comments about the staff of the unemployment benefit offices who work hard to provide advice. His comments were an insult to those who work long hours in difficult circumstances in those offices.
The hon. Member for Bradford, South should recognise that we should support a local authority which has changed control and wishes to do things for those who are least able to help themselves. An example is what that council is doing with old people's homes. The so-called "secret document" which the hon. Gentleman produced was no doubt another example of the kind of theft of which we have seen so much—[Interruption.] Well, it was either untrue to say that it was secret or, if it was secret, how did it get into the hon. Gentleman's hands—

Mr. Cryer: On a point of order, Miss Boothroyd. The Minister, whose tongue frequently runs away with him, has implied that I stole the document. May I put it on the record that that document was sent to me by a constituent and that Members of Parliament have every right to receive documents from constituents so that they can expose scandals that are taking place under Tory control?

The Second Deputy Chairman: That is not a point of order. Our Standing Orders have not been breached.

Mr. Gummer: I regret the comment that it was in any sense a theft by the hon. Gentleman. The document obviously fell off a lorry.
The truth is that Bradford has sought to do something about its old people's homes. As the document showed, Bradford has tried to raise the standards of its old people's homes, which had fallen disgracefully under the previous Labour administration.
The hon. Gentleman should take a leaf from the book of the Bishop of Bradford who, having discussed the matter with the leader of the Conservative group, said, "We shall be watching what the Conservative group does. We shall be monitoring it most carefully. I have now been satisfied on a number of things about which I was worried." I believe that under its new control, Bradford

city council will try to improve things for the people of Bradford. I shall be watching and monitoring it most carefully. However, at least I shall do so honourably ad with an open mind instead of with the closed, reactionary Left-wing minds from which we have heard today.
What has been said has little to do with the Bill. However, it has shown that Opposition Members are still smarting from having lost that by-election.

Mr. Rooker: The Minister's comments are not an answer to the debate. The right hon. Gentleman has made absolutely no attempt to answer any of the debate on amendment No. 16. That is disgraceful. My hon. Friends, the Members for Bradford, South (Mr. Cryer), for Bradford, North (Mr. Wall) and for Bradford, West (Mr. Madden) make no apology for devoting the debate to the Bradford issue. My hon. Friend the Member for Halifax (Mrs. Mahon). Has made points about her own local authority, as did the hon. Member for Sheffield, Hallam (Mr. Patnick). However, the Minister completely ignored the issue.
Let us stick with Bradford a moment. The Minister may say that everything is okay, fine and rosy, but like other hon. Members, I have in my possession not a stolen document, but a disreputable document. It is the Conservative manifesto from last May. There is not a single mention in it of any of the things that are now being introduced by Bradford's Tory-controlled authority.
The Minister referred to attacks on staff in unemployment benefit offices and at the Department of Social Security. My hon. Friend the Member for Bradford, South made no such attack. Indeed, the Minister must know that it is not part of the function of a civil servant in an unemployment benefit office or a social security office to give advice. Such civil servants are specifically debarred from giving advice. That is why, in all the social security pamphlets published by the Government, people are advised to go to citizens advice bureaux. Civil servants are not empowered to give advice. Therefore, my hon. Friend's point is valid because advice shops were and are required.
Advice bureaux are one of the areas of activity covered in the document which was compiled by the controlling group in Bradford. Among the political objectives set down by it for discussion on Tuesday 27 September was
abolition of current local authority functions not politically acceptable".
Giving advice to poor people so that they can maximise their benefits to assist the local economy is politically acceptable to the Opposition, but Conservative Members want no part in it.
The Minister talked about value for money. That is an important matter, to which we shall no doubt return. I suspect that, during the current year and probably the following year, Bradford will figure largely in that context. It will certainly figure next May, like the other large cities and metropolitan districts to which the amendment applies, because that is when the 36 metropolitan districts should have elections. We demand those elections. It does not matter whether they are in Birmingham or Bradford: we want those elections. The Government have banned the election in those 36 large towns and cities next May. They could easily have restored the annual elections in those cities when they abolished the metropolitan counties. Bradford can get away with what it is doing now because it does not have to face the electorate for two years.
The Labour party is not afraid to face the electorate. [Interruption.] We will stand by the results of the ballot box. The Government are scared stiff of bringing back annual elections in the large cities. They talk about democracy and accountability, but that is sheer cant and hypocrisy. We want those elections in the metropolitan districts next May.
One of the proposals put forward by Bradford, which I have not yet heard explained—perhaps one of my hon. Friends can explain it—relates to the top management contracts that will be introduced. Four factors were listed in the document. The top management will be placed on seven-year contracts. Salaries will be cut to 80 per cent., but it is clear that most top managers will be able to earn at least their existing salary, and it is intended that they will have the opportunity to earn 115 per cent. of their existing salary. Performance targets will be set and reviewed every two years. There is nothing wrong with that; that is good management practice, whether in the public or private sector.
However, I want an explanation of the words "perks to be introduced". I want to know what perks will be given to top management. Clearly, those would be supported by Government. They will be paying rate support grant in order to pay the perks to top managers who will be able to earn 115 per cent. of their salary. What perks will the Government be funding through the rate support grant? I want the answer to that question.

Mrs. Mahon: May I remind the Minister that Calderdale was controlled by Tories and Liberals continuously until May of this year?

Question put, That the amendment be made:

The Committee divided: Ayes 173, Noes 215.

Division No. 471]
[9.57 pm


AYES


Abbott, Ms Diane
Coleman, Donald


Adams, Allen (Paisley N)
Cook, Frank (Stockton N)


Allen, Graham
Cook, Robin (Livingston)


Archer, Rt Hon Peter
Corbett, Robin


Armstrong, Hilary
Cox, Tom


Ashdown, Paddy
Crowther, Stan


Banks, Tony (Newham NW)
Cryer, Bob


Barnes, Harry (Derbyshire NE)
Cunliffe, Lawrence


Barnes, Mrs Rosie (Greenwich)
Cunningham, Dr John


Barron, Kevin
Davies, Rt Hon Denzil (Llanelli)


Beckett, Margaret
Davies, Ron (Caerphilly)


Bell, Stuart
Davis, Terry (B'ham Hodge H'l)


Benn, Rt Hon Tony
Dixon, Don


Bennett, A. F. (D'nt'n &amp; R'dish)
Dobson, Frank


Bermingham, Gerald
Doran, Frank


Bidwell, Sydney
Duffy, A. E. P.


Blair, Tony
Dunnachie, Jimmy


Blunkett, David
Dunwoody, Hon Mrs Gwyneth


Boateng, Paul
Eastham, Ken


Boyes, Roland
Evans, John (St Helens N)


Bradley, Keith
Ewing, Harry (Falkirk E)


Bray, Dr Jeremy
Fatchett, Derek


Brown, Gordon (D'mline E)
Faulds, Andrew


Brown, Nicholas (Newcastle E)
Fearn, Ronald


Buchan, Norman
Field, Frank (Birkenhead)


Buckley, George J.
Fields, Terry (L'pool B G'n)


Caborn, Richard
Fisher, Mark


Callaghan, Jim
Flannery, Martin


Campbell, Menzies (Fife NE)
Flynn, Paul


Campbell, Ron (Blyth Valley)
Foot, Rt Hon Michael


Campbell-Savours, D. N.
Foster, Derek


Clark, Dr David (S Shields)
Fraser, John


Clay, Bob
Galbraith, Sam


Clelland, David
Galloway, George


Clwyd, Mrs Ann
Garrett, John (Norwich South)


Cohen, Harry
Gilbert, Rt Hon Dr John





Godman, Dr Norman A.
Nellist, Dave


Gordon, Mildred
Oakes, Rt Hon Gordon


Gould, Bryan
O'Brien, William


Grant, Bernie (Tottenham)
O'Neill, Martin


Griffiths, Nigel (Edinburgh S)
Orme, Rt Hon Stanley


Griffiths, Win (Bridgend)
Patchett, Terry


Grocott, Bruce
Pike, Peter L.


Hardy, Peter
Powell, Ray (Ogmore)


Heffer, Eric S.
Prescott, John


Henderson, Doug
Primarolo, Dawn


Hinchliffe, David
Quin, Ms Joyce


Home Robertson, John
Randall, Stuart


Howarth, George (Knowsley N)
Redmond, Martin


Hoyle, Doug
Richardson, Jo


Hughes, John (Coventry NE)
Roberts, Allan (Bootle)


Hughes, Robert (Aberdeen N)
Robinson, Geoffrey


Hughes, Roy (Newport E)
Rogers, Allan


Hughes, Sean (Knowsley S)
Rooker, Jeff


Illsley, Eric
Ross, Ernie (Dundee W)


Janner, Greville
Rowlands, Ted


John, Brynmor
Sedgemore, Brian


Jones, Barry (Alyn &amp; Deeside)
Sheerman, Barry


Jones, Martyn (Clwyd S W)
Sheldon, Rt Hon Robert


Kirkwood, Archy
Shore, Rt Hon Peter


Leadbitter, Ted
Short, Clare


Leighton, Ron
Skinner, Dennis


Lestor, Joan (Eccles)
Smith, Andrew (Oxford E)


Lewis, Terry
Soley, Clive


Litherland, Robert
Spearing, Nigel


Livingstone, Ken
Steel, Rt Hon David


Livsey, Richard
Steinberg, Gerry


Lofthouse, Geoffrey
Stott, Roger


Loyden, Eddie
Straw, Jack


McAvoy, Thomas
Taylor, Matthew (Truro)


McCartney, Ian
Thompson, Jack (Wansbeck)


McKelvey, William
Turner, Dennis


McLeish, Henry
Wall, Pat


McNamara, Kevin
Wallace, James


McTaggart, Bob
Walley, Joan


Madden, Max
Wardell, Gareth (Gower)


Marion, Mrs Alice
Wareing, Robert N.


Marek, Dr John
Welsh, Michael (Doncaster N)


Marshall, Jim (Leicester S)
Williams, Rt Hon Alan


Martlew, Eric
Williams, Alan W. (Carm'then)


Meale, Alan
Wilson, Brian


Michael, Alun
Winnick, David


Michie, Bill (Sheffield Heeley)
Wise, Mrs Audrey


Mitchell, Austin (G't Grimsby)
Worthington, Tony


Morgan, Rhodri



Morley, Elliott
Tellers for the Ayes:


Morris, Rt Hon A. (W'shawe)
Mr. Frank Haynes and


Mowlam, Marjorie
Mrs. Llin Golding.


Murphy, Paul





NOES


Alexander, Richard
Brazier, Julian


Amess, David
Bright, Graham


Amos, Alan
Brown, Michael (Brigg &amp; CI't's)


Arnold, Tom (Hazel Grove)
Bruce, Ian (Dorset South)


Ashby, David
Budgen, Nicholas


Aspinwall, Jack
Burns, Simon


Atkins, Robert
Burt, Alistair


Baker, Nicholas (Dorset N)
Butcher, John


Baldry, Tony
Butler, Chris


Banks, Robert (Harrogate)
Butterfill, John


Batiste, Spencer
Carlisle, Kenneth (Lincoln)


Beaumont-Dark, Anthony
Carrington, Matthew


Bendall, Vivian
Cash, William


Bennett, Nicholas (Pembroke)
Chope, Christopher


Benyon, W.
Clark, Hon Alan (Plym'th S'n)


Bevan, David Gilroy
Clark, Dr Michael (Rochford)


Blackburn, Dr John G.
Clark, Sir W. (Croydon S)


Blaker, Rt Hon Sir Peter
Clarke, Rt Hon K. (Rushcliffe)


Bonsor, Sir Nicholas
Colvin, Michael


Boswell, Tim
Coombs, Anthony (Wyre F'rest)


Bottomley, Peter
Coombs, Simon (Swindon)


Bottomley, Mrs Virginia
Cope, Rt Hon John


Bowden, Gerald (Dulwich)
Cran, James


Bowis, John
Currie, Mrs Edwina


Boyson, Rt Hon Dr Sir Rhodes
Curry, David






Davis, David (Boothferry)
Lang, Ian


Day, Stephen
Lawrence, Ivan


Devlin, Tim
Lee, John (Pendle)


Dorrell, Stephen
Leigh, Edward (Gainsbor'gh)


Dover, Den
Lennox-Boyd, Hon Mark


Dunn, Bob
Lester, Jim (Broxtowe)


Durant, Tony
Lloyd, Sir Ian (Havant)


Dykes, Hugh
Lloyd, Peter (Fareham)


Emery, Sir Peter
Lord, Michael


Evennett, David
McCrindle, Robert


Fairbairn, Sir Nicholas
Macfarlane, Sir Neil


Fallon, Michael
MacGregor, Rt Hon John


Favell, Tony
MacKay, Andrew (E Berkshire)


Fenner, Dame Peggy
McLoughlin, Patrick


Field, Barry (Isle of Wight)
McNair-Wilson, Sir Michael


Finsberg, Sir Geoffrey
McNair-Wilson, P. (New Forest)


Fishburn, John Dudley
Madel, David


Forman, Nigel
Malins, Humfrey


Forsyth, Michael (Stirling)
Mans, Keith


Forth, Eric
Maples, John


Fox, Sir Marcus
Marlow, Tony


Franks, Cecil
Marshall, John (Hendon S)


Freeman, Roger
Martin, David (Portsmouth S)


Fry, Peter
Maude, Hon Francis


Gale, Roger
Mayhew, Rt Hon Sir Patrick


Gardiner, George
Mellor, David


Garel-Jones, Tristan
Meyer, Sir Anthony


Gill, Christopher
Miller, Sir Hal


Glyn, Dr Alan
Mills, Iain


Goodhart, Sir Philip
Mitchell, Andrew (Gedling)


Goodson-Wickes, Dr Charles
Mitchell, David (Hants NW)


Gorman, Mrs Teresa
Moate, Roger


Gow, Ian
Montgomery, Sir Fergus


Grant, Sir Anthony (CambsSW)
Moore, Rt Hon John


Greenway, Harry (Ealing N)
Moss, Malcolm


Greenway, John (Ryedale)
Moynihan, Hon Colin


Gregory, Conal
Mudd, David


Griffiths, Peter (Portsmouth N)
Neale, Gerrard


Grist, Ian
Neubert, Michael


Ground, Patrick
Nicholson, David (Taunton)


Grylls, Michael
Onslow, Rt Hon Cranley


Gummer, Rt Hon John Selwyn
Paice, James


Hamilton, Neil (Tatton)
Patnick, Irvine


Hampson, Dr Keith
Patten, John (Oxford W)


Hanley, Jeremy
Pattie, Rt Hon Sir Geoffrey


Hargreaves, A. (B'ham H'll Gr')
Pawsey, James


Hargreaves, Ken (Hyndburn)
Peacock, Mrs Elizabeth


Harris, David
Porter, Barry (Wirral S)


Haselhurst, Alan
Porter, David (Waveney)


Hayes, Jerry
Portillo, Michael


Hayhoe, Rt Hon Sir Barney
Powell, William (Corby)


Hayward, Robert
Price, Sir David


Heathcoat-Amory, David
Raffan, Keith


Heddle, John
Raison, Rt Hon Timothy


Hicks, Mrs Maureen (Wolv' NE)
Ridley, Rt Hon Nicholas


Hicks, Robert (Cornwall SE)
Ridsdale, Sir Julian


Higgins, Rt Hon Terence L.
Roe, Mrs Marion


Hogg, Hon Douglas (Gr'th'm)
Rowe, Andrew


Hordern, Sir Peter
Rumbold, Mrs Angela


Howard, Michael
Ryder, Richard


Howarth, Alan (Strat'd-on-A)
Shaw, David (Dover)


Howarth, G. (Cannock &amp; B'wd)
Shaw, Sir Michael (Scarb')


Howell, Ralph (North Norfolk)
Shelton, William (Streatham)


Hughes, Robert G. (Harrow W)
Shephard, Mrs G. (Norfolk SW)


Hunt, David (Wirral W)
Shepherd, Colin (Hereford)


Hunt, John (Ravensbourne)
Shepherd, Richard (Aldridge)


Hunter, Andrew
Shersby, Michael


Irvine, Michael
Sims, Roger


Irving, Charles
Skeet, Sir Trevor


Jack, Michael
Smith, Tim (Beaconsfield)


Jackson, Robert
Speed, Keith


Janman, Tim
Spicer, Michael (S Worcs)


Johnson Smith, Sir Geoffrey
Stern, Michael


Jones, Robert B (Herts W)
Stewart, Andy (Sherwood)


Jopling, Rt Hon Michael
Stradling Thomas, Sir John


Key, Robert
Taylor, John M (Solihull)


Knapman, Roger
Thornton, Malcolm


Knight, Dame Jill (Edgbaston)
Thurnham, Peter


Knox, David
Trippier, David


Lamont, Rt Hon Norman
Vaughan, Sir Gerard





Waddington, Rt Hon David



Wakeham, Rt Hon John
Tellers for the Noes:


Wheeler, John
Mr. David Maclean and


Widdecombe, Ann
Mr. Tom Sackville.


Wolfson, Mark

Question accordingly negatived.

It being Ten o'clock, THE SECOND DEPUTY CHAIRMAN left the Chair to report Progress and ask leave to sit again.

Ordered,
That, at this day's sitting, the Rate Support Grants Bill may be proceeded with, though opposed, until any hour.—[Mr. Neubert.]

Again considered in Committee.

Mr. Cryer: On a point of order, Miss Boothroyd. A serious constitutional matter arose in the previous debate. The hon. Member for Sheffield, Hallam (Mr. Patnick) appeared to take over the job of the Members of Parliament for Sheffield and Keighley, in that the Bradford amendment was proposed, but there was no representation of the Tory view from other hon. Members in the metropolitan district. I want to be assured that hon. Members are not having their jobs taken from them by the hon. Member for Hallam.

The Second Deputy Chairman of Ways and Means: The Chair cannot give any assurance on that point. It has no relationship whatsoever to the Chair.

Clauses 1 and 2 ordered to stand part of the Bill.

Schedule 1 agreed to.

Clause 3 ordered to stand part of the Bill.

Schedule 2

TOTAL EXPENDITURE: 1989–90

Mr. O'Brien: I beg to move amendment No. 10, in page 14, line 31, leave out from 'which' to end of line 34 and insert
`reflects the retail prices index for September 1988'.
The amendment refers to a formula in schedule 2, and in particular to the part of that formula described as 'Z'. It seeks to increase local authorities' budgets for 1988–89 in line with the latest estimate of inflation. If we are to be fair and give serious consideration to local authority expenditure, we must at least allow an increase for the rate of inflation. In this instance, we refer to the amount relevant to the calculation of grant entitlement in 1989–90.
Schedule 2 sets out the formula for determining a notional expenditure figure, "the relevant amount", for 1989–90, on which local authorities' grant entitlement will be based. 'TE' in the formula represents local authorities' 1988–89 budgeted expenditure, while 'Z' represents an inflation factor. The amendment puts on the face of the Bill an inflation factor in line with the index for September 1988. According to Government figures, the inflation factor for that month was recorded as 5·9 per cent.
Announcing the provision for local authority current expenditure in 1989–90 on 7 July this year, the Secretary of State said that the increase was slightly above the anticipated level of inflation. The increase, adjusted for the extra provision for poll tax costs, was 4·3 per cent., compared with the Government's latest forecasts for the increase in the gross domestic product deflator of 4 per cent. In July the retail price index was increasing faster, at a rate of 4·5 per cent. In the autumn statement, the


Chancellor of the Exchequer raised the increase in the GDP deflator in 1989–90 to 5 per cent. Retail price inflation is forecast to rise in 1989–90 above the Chancellor's latest forecast of 6·25 per cent. in the fourth quarter of 1988 before falling back to 5 per cent. in the fourth quarter of 1989.
On either measure of inflation for 1989–90, the GDP deflator or the RPI, the provision for local authority expenditure in 1989–90 is insufficient to maintain current service levels. We are talking about inflation as it has been recorded by the Government, but for many reasons the inflationary factor facing local authorities is much larger than the recorded RPI factor. All we are asking is that the formula should meet the recorded increase of 5·9 per cent.
The Secretary of State should recognise the surge in inflation that has occurred since July and increase the expenditure provisions. A rise in the expenditure provision would necessitate an increase in Government grant, because otherwise ratepayers would bear the whole cost of the increased provision. That is the background to the amendment. I hope that the Minister will give some explanation of why the amendment cannot be accepted. It is a constructive approach to resolving the issues facing local government.
It would be much easier for the Minister to accept the amendment, ensuring that local authorities have the opportunity to meet their commitment in line with the increase in the RPI. I ask the Minister to accept the amendment. If she cannot, I ask her to give a viable or reasoned explanation of why it cannot be accepted.

Mrs. Virginia Bottomley: The effect of the amendment on local government would be one which most Labour Members would greatly regret. I realise that the complexity of these matters is such that people do not always think through the effects. The higher the Z factor, the sharper the slope and the greater the effect on the higher spending authorities. Brent, about which we have heard a certain amount this evening, would stand to lose nearly £3 million if we accepted the amendment. Lambeth would lose £4 million, Islington £5·5 million, and Birmingham about £4 million.
I should like to explain briefly the Z factor, although I am not sure that it is the most edifying part of our discussions. It is important to be clear that the Z factor does not refer to the amount of grant available. My right hon. Friend the Secretary of State made it clear in July that this is set to rise by 9 per cent., which is considerably above the level of inflation, to £13,575 million. The point about expenditure and the Z factor is rather different.
The amendment is about the factor in the forthcoming rate support grant settlement that is consistent with the proposal that local authority current expenditure should increase by 4·8 per cent. between this year and next. This factor, called the Z factor, is the uplift for total expenditure. In addition to current expenditure, total expenditure includes the financing costs of capital expenditure, but it excludes any expenditure financed by specific grants. Mainly due to the substantial increase in specific grants next year, such as the new grant for community charge preparation costs, the Z factor is likely to be about 1·032, which is a 3·2 per cent. increase. It will be spelt out more precisely in the consultation paper on next year's settlement.
The hon. Member for Birmingham, Perry Barr (Mr. Rooker) referred to our proposals for current expenditure

provision generally and he urged us to say that local authority expenditure should rise by the retail price index for September, which is 5·9 per cent. That would be wholly inappropriate because while the RPI may be an appropriate measure for consumer prices, the generally accepted measure of inflation in the economy is the GDP deflator. It is forecast to rise by 5 per cent. in 1989–90 and our proposals on current expenditure provision are broadly in line with that.
The Z factor is not about the amount of grant to be available. That increases by 9 per cent., as my right hon. Friend announced. The amendment would have a particularly harsh effect on many local authorities that Labour Members most wish to help.

Mr. Cryer: Does the Z factor cover items such as increased capital expenditure on education? In the current year, Bradford will spend about £10·487 million on capital expenditure for school buildings. I have a press release from Dixon Group plc announcing that it will help to fund a city technology college in Bradford. The capital expenditure on that college will cost the public purse about £10 million. One small sector of education in Bradford will attract the equivalent of the capital expenditure on all the 258 public sector schools in Bradford. I wonder whet her the increase in grant to £13 billion covers the announcement that will be made tomorrow?
The Government say that they make grant calculations, yet private bodies are making announcements about Government policy. They are handing over government to squalid little people such as Stanley Kalms who is making a bid for a knighthood by announcing this CTC. It is time that the Government made the position clear. Does local authority expenditure include these private ventures encouraged by the Secretary of State for Education and Science? It is an outrage that Dixon should make an announcement of £10 million of public expenditure, and I wish to know whether it has been included in the Minister's calculations or whether it is extra money that they can find for Dixon, but not for education in Bradford.
It is outrageous that the Government are lining the pockets of the private sector yet they cannot give the House a clear statement of whether such decisions are included in their calculations. Nor do we know whether they plan to take them into account in future calculations for rate support grant but cannot yet tell the House because a deal has not been reached with some get-rich-quick person—they are called entrepreneurs nowadays—who is trying to get a reward or a title.

Mr. O'Brien: I am grateful to the Minister for making part of the formula clear, although we still have many questions about the other factors of the formula in schedule 2.
The Minister said that if the retail price index was the factor of inflation it could have far-reaching effects on local authorities, but I am not convinced that that will be the case. Another worrying factor is the intention of water authorities, especially Yorkshire water authority, substantially to increase water charges. In Yorkshire and Humberside, local authorities will have to pay up to 27 per cent. more. I hope that the Minister will take note of chat inflation in the coming year.

Mr. Martin Redmond: Is my hon. Friend aware that the Yorkshire water authority is increasing charges to boat owners? Does not the Minister believe that


it should try to keep prices down for leisure activities to enable the public to enjoy the recreational facilities that are so desperately needed in our area?

Mr. O'Brien: It is clear that my hon. Friend is mirroring my worry which has been caused by the proposals of, especially, the Yorkshire water authority—proposals which I am sure will be followed by other water authorities—to make sure that privatisation is attractive. Those are the issues that will be facing local authorities and the Minister should be aware of that worry.
In presenting this amendment, I wanted to probe the question of the Z factor in the formula. Some explanation has been given, but I am sure that there are further questions that should be asked. Because of the complexity of this formula and the fact that we shall be referring to it

again in the near future, I beg to ask leave to withdraw the amendment.

Mrs. Virginia Bottomley: I do not intend to say very much more about the Z factor, but I would like to say that the mean attack by the hon. Member for Bradford, South (Mr. Cryer) on better education is irrelevant. To attempt to do Bradford out of a city technology college says very little for him and has nothing to do with the Z factor.

The Second Deputy Chairman: Would the hon. Member for Normanton (Mr. O'Brien) make his position clear on the amendment?

Mr. O'Brien: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Rooker: I beg to move amendment No. 11, in page 15, line 2, leave out from 'is' to end of line 5 and insert
such an amount as agreed after consultation with the Local Authority Associations, which amount represents the expenditure relevant authorities might reasonably be expected to incur in the year beginning in 1989 in connection with Part I of the Local Government Finance Act 1988.".
I invite hon. Members who are here to legislate to study page 15 of the Bill. There is a rather strange figure on the second line of page 15. It says:
The Secretary of State shall secure that the aggregate of figures determined under this paragraph for relevant authorities is £53,057,231".
That is a very precise figure. It is incredibly accurate to the last pound. I know that we take the accuracy of poll tax calculations to extremes, but I believe that this one beats the lot.
I understand that 43 full-time civil servants have been working on the poll tax Bill to get it to the House, and that was before the Government added about 400 amendments. At the end of the day, they arrived at the figure of £53,057,231. That money is allegedly start-up money for the poll tax. It is supposed to help local authorities with the horrendous costs of introducing this quite outrageous poll tax Act. This tax will cost twice as much to collect as did the rates, and local authorities are said to need £53,057,231.
Our amendment seeks to take out the precise figure, because we wish to show that the sum allocated by the Government for poll tax set-up costs is inadequate. We
also wish to ensure that the position is kept under review, which is crucial.
I know that the Minister of State visited Birmingham recently. Although I had a public meeting with Councillor Knowles last Thursday, I did not have a chance to discuss the Minister's visit with him. However, I gather from press reports that the Minister has promised to double the amount of money allocated to Birmingham for its poll tax set-up costs. I am putting words into the Minister's mouth, but that is what the press reports led me to believe.

Mr. Gummer: Perhaps to help the hon. Gentleman, I will say that I was dispelling a false comment that the community charge sum which had been provided in this part, which is a specific grant, was all that was coming, when he knows there is provision for twice as much in the normal RSG. Therefore, the total amount to Birmingham was about twice what had been expected. That is the only point that I was making, which I think was accepted by all hon. Members.

Mr. Rooker: I accept that, but it is no way near enough.I am not saying that the £53 million is all that the local authorities will receive.
The £53 million allocation is, I understand, based on a total of £110 million. The Government have decided that that sum represents the revenue costs to English authorities of poll tax preparation in 1989–1990. We are only talking about the start-up revenue costs and not capital outlay, which will involve considerably larger sums.
I presume that the Minister has gone through all the briefs that were used in Committee—more would have been done since then—and has seen all the detailed figures. Local authorities contend, however, that the £110 million underestimates the likely costs. The Government's defence—no doubt we shall hear more of it later on—is that the estimate is in line with the cost estimates made by Price

Waterhouse. We have received information from local authority associations—we do not just dream up figures—which challenges the Government's estimates.
Price Waterhouse estimated that the cost to English authorities would be £108 million. The start-up revenue costs, however, were based on November 1987 prices, not 1988 or 1989 prices. Inflation has been running at 5·9 per cent. for the past 12 months and the gross domestic product deflator—I hate using the initials GDP because I think that it sounds bad to those listening to our debates—for 1988–89 has been predicted in the Autumn Statement at 6·26 per cent. That means that the Price Waterhouse estimate of £108 million should be £122 million to be worth the same, in real terms, by November 1989. That figure is 11 per cent. more than the sum recommended by the Government's consultants. Given that difference, it is reasonable to consider how Price Waterhouse reached its figure.
It is unfair that we did not have greater advance warning about this Bill, but, at this time of night, I shall not go into the detail of the Price Waterhouse report; rather, I shall give a summary of my criticisms of it. That report was based on a small sample of authorities. It rested on dubious assumptions and missed several areas of spending, which I shall elaborate upon if required. No allowance was made for preparatory publicity or the staff training required to administer the poll tax.
It is obvious that major publicity campaigns will be needed for the new Tory tax. Central Government have earmarked £1 million for publicity in England this year. I suspect that when the poll tax is implemented, that lot on the Tory Benches will have spent more than £1 million on glossy leaflets through front doors and on television advertising, usually with the subliminal Tory logo in the corner of the screen. In Scotland, the Government put a leaflet through every door telling people how good the poll tax was, which was printed in blue. Such was the neutrality of the Government's propaganda efforts in Scotland.
We know that the Government have earmarked money for publicity, but we appreciate that it cannot all be done centrally. In England, registration dates will vary and, therefore, each local authority will have to mount its own campaign to inform the people of that date.

Mr. Redmond: rose—

Mr. Rooker: I shall give way to my hon. Friend in a moment.
In Birmingham, 16 per cent. of the adult population are from the ethnic minorities. I do not seek to draw the patronising conclusion that they cannot speak or read English, because in every household in Birmingham there is someone who can. There are people, however, who, after living and working in this country for years, still do not have a full command of the English language. One sees that not just among the ethnic minorities. Constituents of mine who came here in 1950 from Latvia could not get British citizenship under naturalisation because even today they could not pass an English language test. Local authorities will have to have special publicity, and languages other than English will have to be used. That will vary from authority to authority.

Mr. Redmond: My hon. Friend mentioned the vast amount of money that the Government are spending on propaganda in an attempt to brainwash and kid the public.


Is it the local authorities that will have to spell out the truth about the poll tax, and will the Minister see that authorities that do so are not penalised and surcharged?

Mr. Rooker: I should not want my hon. Friend to misunderstand the position. Local authorities are debarred by the Local Government Finance Act 1988 from telling the truth about the poll tax because if they did so, they would be accused of putting out propaganda. That is outlawed under the publicity clauses in that Act. The Government will determine the form of the poll tax bills received by our constituents. It will not be up to the local authorities—they will not be able to tell the truth about the poll tax.
The Price Waterhouse report did not refer to staff training. It is unrealistic and bordering on stupidity to implement a major change such as this without staff training. The system will be heavily dependent on computers. That was demonstrated at local authority conferences; there was even a stall or two at the Labour party conference. Firms up and down the country are providing local authorities with their wares and equipment such as forms and computers.
The bailiffs are involved—everybody is involved. Everyone will make money out of the poll tax except our constituents who, by and large, will have to pay it to pay for the cuts that go to the well-off. Staff must be trained in the intricacies of the legislation. It is not a five-minute job. There was no estimate for staff training in the Price Waterhouse report, on which the Government based the figure of £53 million.
The local authority associations have been monitoring the likely cost to members, with a series of surveys. The sample is far bigger than that used by Price Waterhouse—it is over 300 compared with Price Waterhouse, which looked at 25 local authorities, when in England alone close on 400 will implement the poll tax. It is too early to say that all local authorities know what their exact final costs will be, but it is certain that, as implementation nears, the authorities will make more decisions and that final costs are likely to rise.
In the explanatory and financial memorandum to the Local Government Finance Bill, the Government estimated costs of £70 million to £90 million in 1989–90. That has already been raised by 57 per cent. Since the poll tax was presented to the House on 3 December last year, the likely revenue costs alone—not capital costs—have been increased by the Government by 57 per cent. The Price Waterhouse figures in real terms—the £122 million rather than the £108 million—show an increase of 74 per cent. on the original figure.
As authorities will be able to assess the final cost only when the tax is close to implementation, we should like some commitments from the Government, which we believe to be reasonable. The first is to keep the position under constant review, which is important. It is nothing personal, but the poll tax will become a living nightmare for the Minister in the next 18 months. Over the next 18 months or two years it will become a living nightmare for the Conservative party and the Minister will have to keep the matter under constant review.
I want the Minister to keep one narrow area of policy—the start-up and revenue costs to local authorities—under review. Clearly, the figures available when the Bill

was published have been shown to be too low. The Minister should also make available whatever amounts prove necessary to launch the Government's flagship properly. If the Government do not launch it properly, it will sink. We do not want to poll tax to sink—oh, no. The Government have pushed it through the House, and the Government are going to get it rammed down their throats at the ballot box from now until they depart from office.
10.45 pm
I could—I emphasise "could"—detain the Committee a lot longer going through all the other points that Price Waterhouse failed to take into account. The report lists unspecified assumptions, it refers to unstated formulas and it extrapolates through some unknown process. There is no explanation in the report about the extrapolations or the formulas. The report assumes that there will be no customer avoidance—that is, no evasion of the tax. But we know that there will be evasion.
The report fails to consider a wide range of material. It states that there will be no increase in the proportion of people paying by instalments. Frankly, the poll tax structure means that every citizen should pay the tax through 10 monthly instalments. That is the opposite of the present two half-yearly rate demands. The pressure will be on people to pay the whole poll tax in advance, as that is the only alternative. The idea that a professional firm of accountants, in assessing the likely start-up costs, did not assume that a bigger proportion of people would pay by instalments, shows that the firm is not living in the real world and did not take account of the legislation that it was asked to judge. There is no attempt in the report to underpin the figures on such things as efficiency savings.
However, I will not go into those matters in detail, although I could. I do not think that that would do the Committee justice, because as the weeks pass and the new Session starts, the Government will have nearly two dozen orders to present to the House, every one of which will be prayed against. We will deal with the poll tax week in and week out. This is just a skirmish, but it is an important narrow point that we are trying to get the Government to acknowledge.
The Government should give the commitments that I have asked for—that the matter will be kept under constant review and that, when they receive figures which prove that their figures were wrong, the Government will at least make good the balance to local authorities. Otherwise, a tax will be introduced which will cost 4p in the pound to collect and which is twice as costly to collect as the rates. On top of the 4p, we will have to spend even more money on the start-up costs. That is quite ludicrous. There is no earthly reason why local authorities should be penalised any more than the Government have already penalised them.

Mr. Matthew Taylor: After all the hours that we spent debating the poll tax in Standing Committee and in the Chamber it is good to see that nothing changes. The Government are still not giving the details underlying their assumptions and are still not telling us how the calculations are made. They are still producing figures which I suppose do much to try to support their case for the poll tax, but do little to meet the reality that local authorities across the country claim they will experience in, for example, implementing the poll tax and meeting the associated costs.
The figure in the Price Waterhouse document is a good example of the problem. The Minister listened to the hon. Member for Birmingham, Perry Barr (Mr. Rooker). Can the Minister refer to any authorities that have contacted him to say that they believe that the figures are reasonable and to give an idea of the likely costs of implementing the poll tax? Has any local authority given the Minister that message while he was going round the country talking to them and asking them how they will implement the poll tax? Certainly, in my part of the country that has not happened. Irrespective of its merits, the costs of putting the poll tax in place are higher than the amount that the Government have allowed. The cost will be higher than the specific figure that, most unusually, the Government have given in the Bill.
There must be a large question mark over the Committee's being asked to put into legislation figures that bear no relation to reality. The Government are unable to come up with detailed justification for those figures. To tell us that the Price Waterhouse report deals with the matter is hardly adequate.
We have heard about some of the problems, but, like the hon. Member for Perry Barr, I do not want to go into them in great detail. I support what he said about technical problems. One could run through a long list of areas for which the figures and the facts behind the assumptions that Price Waterhouse has made are not given. Price Waterhouse does not even tell us the figures for the examples that it has looked at. It will not let the authorities that it used judge the matter, look at the figures and comment on them. No doubt those authorities would find that useful.
How can the Minister justify the assumptions that Price Waterhouse made in reaching its figures? Those assumptions cannot be justified and therefore the Minister cannot justify the figure that is contained in the Bill. Paragraph 51 of the report says:
There will he no 'customer avoidance' i.e. evasion of the tax".
I do not think that even the Government would pretend that that is true. In Committee we argued at length about the level of avoidance. Like many other hon. Members, I argued that it is likely to be very high, that a tax such as this is likely to be extraordinarily difficult to police, and that it will be difficult to stop people avoiding it. If we assume that the level of avoidance will be the same as that for television licences and car tax, or if we associate collecting poll tax with the difficulties of collecting rates, we see that at least some evasion will take place. The level of avoidance will be much higher than predicted.
How can the Government come forward with a figure that is precise, not to £1,000 or £100 but to £1? How can they reach so precise a figure using a report based on such assumptions? Paragraph 28 of the report says:
The processes involved in administering a Community Charge are the same as those for a rate account, and hence authorities should be able to achieve their current workload ratio".
We all know that it is far easier to identify a house than to identify an individual, and that it is far easier to tax property than to put a tax on everyone, no matter how low his income. They will all pay at least something in poll tax. It is extremely difficult and there are high costs associated with that. It seems that the assumptions on which Price Waterhouse based its report made a low figure inevitable.

One wonders whether they were the assumptions that the Government told Price Waterhouse to make so that they would get the answer that they wanted.
As the hon. Member for Perry Barr said, we are told that there will be no increase in the proportion of people paying by instalments. The poll tax payment system is different from that for rates. With the poll tax one is encouraged to pay by instalments. People may have to opt out of paying by instalments rather then the other way round.
The hon. Member for Perry Barr spoke about the missing areas. No account is taken of the need for publicity. How is a local authority to put the system in place if it is not able to tell people how it will work and to make sure that they are informed? Tory Members would be the first to complain if a local authority did not tell people what was happening, or did not tell them what the timetables for collection and registration would be. Equally, they and the Minister would be the first to complain if authorities were making a complete mess of implementing the poll tax because staff had not been trained adequately and were being asked to do things for which they had no experience or training.
We can only presume that the Price Waterhouse assumptions lie behind the figure used in the Bill. If that is the case, I cannot believe that the Minister can justify that figure. I hope that the Minister will accept the amendment, but if he cannot, he should bring forward an alternative, and explain how he will match the reality of the situation with the fantasy that we have so far had from the Government. At the very least, he should drop the pretence that the figures in the Bill bear any relation to the reality that local authorities will face.

Mr. Peter L. Pike: The Minister intervened in the speech of my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker), but he has not yet told us how he arrived at the exact figure that is in schedule 2 and is referred to in the amendment. One of the problems with the haste with which the Government have pushed through the Bill is that they have not thought it all out.
The Minister for Local Government gave me a written answer last week in reply to a question I asked about the cost of the introduction of the poll tax. In that reply, he mentioned the Price Waterhouse report, published on 23 June, and said that the report
estimated preparation costs in 1989–90 in England and Wales to be between £99 million and £102 million"—
I stress "between" those two figures—
for current expenditure, and between £125 million and £175 million for capital expenditure."—[Official Report, 2 November 1988; Vol. 139, c. 684.]
He went on to give the costs of annual expenditure for collection as "between" £379 million and £435 million, rather than the £200 million that it costs to collect the rates.
How does the Minister conjure up the figure in the Bill of some £53 million? I think that it has been conjured out of the air. As my hon. Friend the Member for Perry Barr and the hon. Member for Truro (Mr. Taylor) have said, there are many flaws in the Price Waterhouse report and the way that it carried out its exercise, but even it did not give that exact figure.

Mr. Gummer: The figure is £53,057,231 because it was £55 million, but we have to take off the money that is destined for the rate-limited authorities. If it went in any


other way, they would not get the money. We know precisely how much each of those will get, and if we take it away from £55 million, we are left with an exact figure. As to the £55 million, it is half the £110 million, because that is a specific grant to make sure that all authorities receive some money for distribution. The rest will be provision under the rate support grant. There is no difficulty about that.
As to the amount itself, it is true that it is within the range presented by Price Waterhouse, but if hon. Members do not like that, let me point out that it is more than the local authorities asked for. They can hardly object to that. Hon. Members suggested that the authorities knew best and it is clear that the Government have listened carefully to what has been said. Therefore, we have here a sensible proposal.
I am looking forward to the great detail of the debates about the community charge, because I shall be able to point out that 51 per cent. of households will be better off; that the poorest will be better off and that one in four of those who pay the poll tax will be helped. I use the term "poll tax" in this case because Opposition Members do not like using the term "community charge" as it reminds everybody that all of us will pay a bit towards the community services that are provided. Opposition Members like using the term "poll tax" for the simple reason that they do not want the public to know the truth about the community charge.
Therefore, I am looking forward to all those debates because in each one I shall be able to point out that for one Conservative tax, the Labour party proposes two taxes; for a sensible tax which makes sure that everybody pays a share and that those who need help will be helped, the Labour party wants two taxes, both of which would be extremely expensive to implement. Yes, I am looking forward enormously to those debates because every single one will show that the community charge is extremely sensible and that the more that people understand it, the more they will support it as they did in the Odsal by-election, which is what Opposition Members hate. That is why we will go on supporting the community charge.

11 pm

Mr. Rooker: I must make one comment on what the Minister has said, because it cannot be allowed to pass. The Minister must learn that households do not pay poll tax; people pay poll tax. He can juggle the figures for households as much as he likes, but the fact is that on his own Department's figures, 14 million adults live in the households that will gain under the poll tax, whereas 19 million adults live in the households that will lose.

Mr. Matthew Taylor: I am sorry to have to return to the point, but the Minister's response has illustrated his weakness on this matter. On every other issue that has been raised, the Minister has given us a reasoned argument, presented his case and answered the points that have been made. Although we may not have agreed with him, he has attempted to answer the points raised. However, on this occasion he has not attempted to do so and he has not justified the figures that he is writing into the legislation. He has not told us whether he honestly believes that there will be no evasion in a world in which there is no publicity at a local level and no training of the

officers who are to put the system into existence. I cannot believe that he honestly believes the figures from Price Waterhouse. He has not answered our points, so I beg that he comes back to put his case to the House.

Mr. Gummer: Clearly, the hon. Gentleman has not been listening. I have answered directly. First, we asked an independent group to give us a figure, and we have accepted that. Secondly, we have taken a higher figure than the people who will implement the measure asked for. What better answer could there be to the questions that have been asked?

Question put, That the amendment be made:—

The Committee divided: Ayes 178, Noes 214.

Division No. 472]
[11.02 pm


AYES


Abbott, Ms Diane
Field, Frank (Birkenhead)


Adams, Allen (Paisley N)
Fields, Terry (L'pool B G'n)


Allen, Graham
Fisher, Mark


Anderson, Donald
Flannery, Martin


Archer, Rt Hon Peter
Flynn, Paul


Armstrong, Hilary
Foot, Rt Hon Michael


Ashdown, Paddy
Foster, Derek


Banks, Tony (Newham NW)
Fraser, John


Barnes, Harry (Derbyshire NE)
Galbraith, Sam


Barron, Kevin
Galloway, George


Beckett, Margaret
Garrett, John (Norwich South)


Beith, A. J.
Gilbert, Rt Hon Dr John


Bell, Stuart
Godman, Dr Norman A.


Benn, Rt Hon Tony
Gordon, Mildred


Bennett, A. F. (D'nt'n &amp; R'dish)
Gould, Bryan


Bermingham, Gerald
Grant, Bernie (Tottenham)


Bidwell, Sydney
Griffiths, Nigel (Edinburgh S)


Blair, Tony
Griffiths, Win (Bridgend)


Blunkett, David
Grocott, Bruce


Boateng, Paul
Hardy, Peter


Boyes, Roland
Haynes, Frank


Bradley, Keith
Heffer, Eric S.


Bray, Dr Jeremy
Henderson, Doug


Brown, Gordon (D'mline E)
Hinchliffe, David


Brown, Nicholas (Newcastle E)
Home Robertson, John


Brown, Ron (Edinburgh Leith)
Howarth, George (Knowsley N)


Buchan, Norman
Hoyle, Doug


Buckley, George J.
Hughes, John (Coventry NE)


Caborn, Richard
Hughes, Robert (Aberdeen N)


Callaghan, Jim
Hughes, Roy (Newport E)


Campbell, Menzies (Fife NE)
Hughes, Sean (Knowsley S)


Campbell-Savours, D. N.
Hughes, Simon (Southwark)


Clark, Dr David (S Shields)
Illsley, Eric


Clay, Bob
Janner, Greville


Clelland, David
John, Brynmor


Clwyd, Mrs Ann
Jones, Barry (Alyn &amp; Deeside)


Cohen, Harry
Jones, Martyn (Clwyd S W)


Coleman, Donald
Kaufman, Rt Hon Gerald


Cook, Frank (Stockton N)
Kirkwood, Archy


Cook, Robin (Livingston)
Leadbitter, Ted


Cox, Tom
Leighton, Ron


Crowther, Stan
Lestor, Joan (Eccles)


Cryer, Bob
Lewis, Terry


Cunliffe, Lawrence
Litherland, Robert


Cunningham, Dr John
Livingstone, Ken


Davies, Rt Hon Denzil (Llanelli)
Livsey, Richard


Davies, Ron (Caerphilly)
Lofthouse, Geoffrey


Davis, Terry (B'ham Hodge H'l)
Loyden, Eddie


Dixon, Don
McAvoy, Thomas


Dobson, Frank
McCartney, Ian


Doran, Frank
McKelvey, William


Duffy, A. E. P.
McLeish, Henry


Dunnachie, Jimmy
McNamara, Kevin


Dunwoody, Hon Mrs Gwyneth
McTaggart, Bob


Eastham, Ken
Madden, Max


Evans, John (St Helens N)
Mahon, Mrs Alice


Ewing, Harry (Falkirk E)
Marek, Dr John


Fatchett, Derek
Martlew, Eric


Faulds, Andrew
Meacher, Michael


Fearn, Ronald
Meale, Alan






Michael, Alun
Sheerman, Barry


Michie, Bill (Sheffield Heeley)
Sheldon, Rt Hon Robert


Mitchell, Austin (G't Grimsby)
Shore, Rt Hon Peter


Morgan, Rhodri
Short, Clare


Morley. Elliott
Skinner, Dennis


Morris, Rt Hon A. (W'shawe)
Smith, Andrew (Oxford E)


Morris, Rt Hon J. (Aberavon)
Snape, Peter


Mowlam, Marjorie
Soley, Clive


Murphy, Paul
Spearing, Nigel


Nellist, Dave
Steel, Rt Hon David


Oakes, Rt Hon Gordon
Steinberg, Gerry


O'Brien, William
Stott, Roger


O'Neill, Martin
Straw, Jack


Orme, Rt Hon Stanley
Taylor, Matthew (Truro)


Patchett, Terry
Thompson, Jack (Wansbeck)


Pike, Peter L.
Turner, Dennis


Powell, Ray (Ogmore)
Wall, Pat


Prescott, John
Wallace, James


Primarolo, Dawn
Walley, Joan


Quin, Ms Joyce
Wardell, Gareth (Gower)


Randall, Stuart
Welsh, Michael (Doncaster N)


Redmond, Martin
Williams, Rt Hon Alan


Richardson, Jo
Williams, Alan W. (Carm'then)


Roberts, Allan (Bootle)
Wilson, Brian


Robertson, George
Winnick, David


Robinson, Geoffrey
Wise, Mrs Audrey


Rogers, Allan
Worthington, Tony


Rooker, Jeff



Ross, Ernie (Dundee W)
Tellers for the Ayes:


Rowlands, Ted
Mr. Robert N. Wareing and


Sedgemore, Brian
Mrs. Llin Golding.




NOES


Aitken, Jonathan
Currie, Mrs Edwina


Alexander, Richard
Curry, David


Alison, Rt Hon Michael
Davis, David (Boothferry)


Amess, David
Day, Stephen


Amos, Alan
Devlin, Tim


Arnold, Tom (Hazel Grove)
Dorrell, Stephen


Ashby, David
Dover, Den


Aspinwall, Jack
Durant, Tony


Atkins, Robert
Dykes, Hugh


Baker, Nicholas (Dorset N)
Emery, Sir Peter


Baldry, Tony
Evennett, David


Banks, Robert (Harrogate)
Fairbairn, Sir Nicholas


Batiste, Spencer
Fallon, Michael


Bendall, Vivian
Favell, Tony


Bennett, Nicholas (Pembroke)
Fenner, Dame Peggy


Benyon, W.
Field, Barry (Isle of Wight)


Bevan, David Gilroy
Finsberg, Sir Geoffrey


Blackburn, Dr John G.
Fishburn, John Dudley


Blaker, Rt Hon Sir Peter
Forman, Nigel


Bonsor, Sir Nicholas
Forsyth. Michael (Stirling)


Boswell, Tim
Forth, Eric


Bottomley, Peter
Fox, Sir Marcus


Bottomley, Mrs Virginia
Franks, Cecil


Bowden, Gerald (Dulwich)
Freeman, Roger


Bowis, John
Fry, Peter


Boyson, Rt Hon Dr Sir Rhodes
Gale, Roger


Brazier, Julian
Gardiner, George


Bright, Graham
Garel-Jones, Tristan


Brooke, Rt Hon Peter
Gill, Christopher


Brown, Michael (Brigg &amp; CI't's)
Glyn, Dr Alan


Bruce, Ian (Dorset South)
Goodhart, Sir Philip


Budgen, Nicholas
Goodson-Wickes, Dr Charles


Burns, Simon
Gorman, Mrs Teresa


Burt, Alistair
Gow, Ian


Butler, Chris
Gower, Sir Raymond


Butterfill, John
Grant, Bernie (Tottenham)


Carrington, Matthew
Greenway, Harry (Ealing N)


Cash, William
Greenway, John (Ryedale)


Chope, Christopher
Gregory, Conal


Clark, Dr Michael (Rochford)
Griffiths, Peter (Portsmouth N)


Clark, Sir W. (Croydon S)
Grist, Ian


Clarke, Rt Hon K. (Rushcliffe)
Ground, Patrick


Colvin, Michael
Grylls, Michael


Coombs, Anthony (Wyre F'rest)
Gummer, Rt Hon John Selwyn


Coombs, Simon (Swindon)
Hamilton, Hon Archie (Epsom)


Cope, Rt Hon John
Hamilton, Neil (Tatton)


Cran, James
Hanley, Jeremy





Hargreaves, A. (B'ham H'll Gr')
Mills, Iain


Hargreaves, Ken (Hyndburn)
Mitchell, Andrew (Gedling)


Harris, David
Mitchell, David (Hants NW)


Haselhurst, Alan
Moate, Roger


Hayes, Jerry
Montgomery, Sir Fergus


Hayhoe, Rt Hon Sir Barney
Morrison, Rt Hon P (Chester)


Hayward, Robert
Moss, Malcolm


Heathcoat-Amory, David
Moynihan, Hon Colin


Heddle, John
Mudd, David


Hicks, Mrs Maureen (Wolv' NE)
Neale, Gerrard


Hicks, Robert (Cornwall SE)
Nelson, Anthony


Higgins, Rt Hon Terence L.
Neubert, Michael


Hogg, Hon Douglas (Gr'th'm)
Nicholls, Patrick


Hordern, Sir Peter
Nicholson, David (Taunton)


Howard, Michael
Onslow, Rt Hon Cranley


Howarth, Alan (Strat'd-on-A)
Paice, James


Howarth, G. (Cannock &amp; B'wd)
Patnick, Irvine


Howell, Rt Hon David (G'dford)
Patten, John (Oxford W)


Howell, Ralph (North Norfolk)
Pawsey, James


Hughes, Robert G. (Harrow W)
Peacock, Mrs Elizabeth


Hunt, David (Wirral W)
Porter, Barry (Wirral S)


Hunt, John (Ravensbourne)
Porter, David (Waveney)


Hunter, Andrew
Portillo, Michael


Irvine, Michael
Powell, William (Corby)


Jack, Michael
Price, Sir David


Janman, Tim
Raffan, Keith


Johnson Smith, Sir Geoffrey
Raison, Rt Hon Timothy


Jones, Robert B (Herts W)
Ridley, Rt Hon Nicholas


Jopling, Rt Hon Michael
Ridsdale, Sir Julian


Key, Robert
Roe, Mrs Marion


Knapman, Roger
Rost, Peter


Knight, Dame Jill (Edgbaston)
Rowe, Andrew


Knox, David
Rumbold, Mrs Angela


Lamont, Rt Hon Norman
Ryder, Richard


Lang, Ian
Sainsbury, Hon Tim


Lawrence, Ivan
Shaw, David (Dover)


Lee, John (Pendle)
Shaw, Sir Michael (Scarb')


Leigh, Edward (Gainsbor'gh)
Shelton, William (Streatham)


Lennox-Boyd, Hon Mark
Shephard, Mrs G. (Norfolk SW)


Lester, Jim (Broxtowe)
Shepherd, Colin (Hereford)


Lloyd, Sir Ian (Havant)
Shepherd, Richard (Aldridge)


Lloyd, Peter (Fareham)
Shersby, Michael


Lord, Michael
Sims, Roger


Lyell, Sir Nicholas
Skeet, Sir Trevor


Macfarlane, Sir Neil
Smith, Tim (Beaconsfield)


MacGregor, Rt Hon John
Speed, Keith


MacKay, Andrew (E Berkshire)
Spicer, Sir Jim (Dorset W)


Maclean, David
Spicer, Michael (S Worcs)


McLoughlin, Patrick
Stern, Michael


McNair-Wilson, Sir Michael
Stewart, Andy (Sherwood)


McNair-Wilson, P. (New Forest)
Stradling Thomas, Sir John


Madel, David
Taylor, John M (Solihull)


Malins, Humfrey
Thurnham, Peter


Mans, Keith
Vaughan, Sir Gerard


Maples, John
Waddington, Rt Hon David


Marshall, John (Hendon S)
Wheeler, John


Martin, David (Portsmouth S)
Widdecombe, Ann


Maude, Hon Francis
Wolfson, Mark


Mayhew, Rt Hon Sir Patrick



Mellor, David
Tellers for the Noes:


Meyer, Sir Anthony
Mr. Kenneth Carlisle and


Miller, Sir Hal
Mr. Tom Sackville.

Question accordingly negatived.

Mr. O'Brien: I beg to move amendment No. 12, in page 15, line 19, leave out sub-paragraph (2) of paragraph 8.

The Chairman of Ways and Means (Mr. Harold Walker): With this, we may discuss the following amendments: No. 13, in page 15, line 21, after 'which', insert
`reflects the residual responsibilities of a local authority in relation to advanced further education and which—'.
No. 14, in page 15, line 28, leave out sub-paragraph (2) of paragraph 9.

Mr. O'Brien: This group of amendments refer to the formula in the Bill. Amendment No. 14 refers to schedule 2(9)(2), which deals with that part of the formula referred to as U. Will the Minister define U and explain its real purpose? If she can do so, it might help to speed up the proceedings.

Mr. Virginia Bottomley: This is a complicated group of amendments, and I hope that the House will bear with me as I explain the way in which T and U tie together. The adjustment for polytechnics, once they are funded by the Polytechnics and Colleges Funding Council, is given effect in the Bill by deducting the total contributions of local authorities to advanced further education pools in 1988–89, and adding back that expenditure—currently financed through the advanced further education pools—that will remain to be financed by local authorities in 1989–90. The deduction is referred to in the Bill as T and the continuing expenditure falling to local authorities as U.
The adjustment T, to which amendment No. 12 relates, is required to obtain estimates of local authorities' expenditure in 1988–89, excluding expenditure on advanced further education. The Bill specifies the deduction of T precisely by reference to figures sent by the Department of Education and Science in a letter to chief education officers in March 1988.
Amendments Nos. 13 and 14 relate to the specification of the addition U, and involve different considerations. The Bill sets out the principles that govern the calculation of U, but leaves the details to be specified in the forthcoming rate support grant report for England, which will help to clarify some other areas of uncertainty. Amendment No. 13 seeks to describe the purpose of the U factor, but although it is apparently helpful, it is both unnecessary and technically incorrect. It is intended that the U adjustment will allow for differences in the relative costs of courses such as science or the arts, on the same basis as we now allow for such variations.
Two options for such variations have been canvassed with local authority associations. The options are quite complex and take account of the very wide range of courses that will still be provided by local authorities. Amendment No. 14 would remove restrictions on the size of U. That is undesirable, even though in practice the amendment may have very little effect.
I am sorry not to have done full justice to the complexity of the subject. I hope that the forthcoming consultation paper will clarify certain other areas for the hon. Member for Normanton (Mr. O'Brien).

Mr. O'Brien: I am grateful to the Minister for her explanation, although it leaves some confusion about the U factor. Amendment No. 12 would remove from the Bill what appears to be an unnecessary provision, and I wish to question the Minister further. Schedule 2 sets out a formula to determine an authority's notional expenditure for 1989–90, on which its grant entitlement will be based.
As local authorities will no longer be responsible for advanced further education, an adjustment to their notional expenditure is therefore required equivalent to their current contribution to the advanced further education pools. That is factor T. The amount of the adjustment is that set out in the March letter, which is referred to in the Bill, from the Department of Education and Science to local authorities. Therefore, schedule

2(8)(2) appears to be a belt-and-braces provision. It states that there is no doubt as to the accuracy of the amounts stated in the DES letter and that no further revision of it shall affect the definition of T in the formula.
Although the Minister briefly referred to T in the formula, paragraph 8 highlights the possibility of further revisions to authorities' contributions to AFE pools. Therefore, what arrangements are to be made for compensating authorities whose eventual contributions to the AFE pool are higher than the T factor in the formula? If expenditure is higher than the formula, surely the local authorities involved should be compensated.
Amendments Nos. 13 and 14 ensure that the purpose of factor U—this is the unknown—are set out in the Bill, rather than left as an arbitrary element. The Minister referred to it as an arbitrary element. Opposition Members prefer the matter to be set out in more detail, as it can vary with different education authorities.
The purpose of leaving out sub-paragraph (2) of paragraph 9 is to discover the purpose of the upper limit of £3 million. Again, how is that limit arrived at, and what is its real purpose?
The reason for the amendments is that the formula in paragraph 4 is of crucial importance in determining the grant that individual authorities will receive in 1989–90. It is essential that they should be comprehensively compensated and subject to the normal process of judicial review, rather than the arbitrary letters which stand for such amounts as the Secretary of State may see fit.
Factor U appears in the formula for education authorities. Sub-paragraphs (4) and (5) of paragraph 4 of schedule 2 are believed to relate to that part of advanced further education for which education authorities will continue to be responsible when the Department of Education and Science takes over the running of the polytechnics in April 1989. Therefore, there is a division between the two Departments—the DES and the Department of the Environment.
There is nothing in the Bill to confirm that interpretation. As I pointed out, unlike TE, T and CC, the factor U is not defined. That is unsatisfactory. It does not do justice to the explanations that are being given, because as it stands, U can be almost any amount that the Secretary of State wishes it to be.
Although adding the words in the amendment would not materially affect the Secretary of State's intention, it would provide a feeling of greater security for local authorities. Similarly, we are given no reason why the amount should be no greater than £3 million. We should be given some explanation for the magical figure of £3 million. If it represents, say, the maximum amount of residual AFE by any local authority, why not define U in the appropriate manner? Looking at the Bill as it stands, no local authority could determine what its relevant amount will be in 1989–90. Therefore, it cannot guess how much grant it will get.
The Secretary of State should be made to explain why these numbers appear in the Bill. That was the first question that I put to the Minister, because I believe that if we had the information in the first instance it would save a good many more questions being asked in the form of our amendments. I hope that the Minister will attempt to fill in the blank spaces and give us some idea what the formula is about.

Mrs. Virginia Bottomley: I shall speak briefly, out of deference to hon. Members, including the hon. Member for Normanton (Mr. O'Brien).
Contributions to the advanced further education pools may subsequently vary from the amounts included in the letter of 29 March 1988 from the Department of Education and Science. It would, however, be wrong to revise our deduction in respect of contributions to advanced further education pools, as T as specified in the Bill is consistent with the reported expenditure underlying the determination of the relevant amount for 1988–89. Paragraph 8(2) is necessary to achieve the required certainty about T.
As hon. Members will readily agree—those of us who aim for a system of no taxation without comprehension, which my right hon. Friend would like, have been sorely tested—the options being considered are quite complex, and take account of the wide range of courses that will still be provided by local authorities. It would have been inappropriate to include the full details of such an adjustment in this Bill, but it is right that we should seek powers no wider than is strictly necessary. Paragraph 9(2) therefore places limits on the size of the adjustment U. Those limits, however, will allow us to adopt either of the options that have been discussed with the local authority associations. There will be further information in the forthcoming rate support grant settlement, which I hope will lead to more clarity.

Question put, That the amendment be made:

The Committee divided: Ayes 85, Noes 176.

Division No. 473]
[11.26 pm


AYES


Abbott, Ms Diane
Home Robertson, John


Adams, Allen (Paisley N)
Howarth, George (Knowsley N)


Ashdown, Paddy
Hughes, John (Coventry NE)


Banks, Tony (Newham NW)
Hughes, Sean (Knowsley S)


Barnes, Harry (Derbyshire NE)
Hughes, Simon (Southwark)


Beckett, Margaret
Jones, Barry (Alyn &amp; Deeside)


Beith, A. J.
Jones, Martyn (Clwyd S W)


Bennett, A. F. (D'nt'n &amp; R'dish)
Kirkwood, Archy


Boateng, Paul
Leadbitter, Ted


Brown, Gordon (D'mline E)
Lewis, Terry


Brown, Ron (Edinburgh Leith)
Livingstone, Ken


Buckley, George J.
Lofthouse, Geoffrey


Callaghan, Jim
McAvoy, Thomas


Campbell, Menzies (Fife NE)
Mahon, Mrs Alice


Clay, Bob
Michael, Alun


Clelland, David
Michie, Bill (Sheffield Heeley)


Cohen, Harry
Morgan, Rhodri


Cook, Robin (Livingston)
Morley, Elliott


Crowther, Stan
Mowlam, Marjorie


Cryer, Bob
Nellist, Dave


Cunliffe, Lawrence
O'Brien, William


Cunningham, Dr John
O'Neill, Martin


Davies, Ron (Caerphilly)
Patchett, Terry


Davis, Terry (B'ham Hodge H'l)
Pike, Peter L.


Dixon, Don
Powell, Ray (Ogmore)


Duffy, A. E. P.
Primarolo, Dawn


Dunnachie, Jimmy
Quin, Ms Joyce


Eastham, Ken
Redmond, Martin


Evans, John (St Helens N)
Robertson, George


Ewing, Harry (Falkirk E)
Rooker, Jeff


Fearn, Ronald
Short, Clare


Fraser, John
Skinner, Dennis


Galbraith, Sam
Spearing, Nigel


Garrett, John (Norwich South)
Steel, Rt Hon David


Golding, Mrs Llin
Stott, Roger


Gordon, Mildred
Taylor, Matthew (Truro)


Griffiths, Nigel (Edinburgh S)
Thompson, Jack (Wansbeck)


Griffiths, Win (Bridgend)
Turner, Dennis


Grocott, Bruce
Wall, Pat


Henderson, Doug
Wallace, James


Hinchliffe, David
Wardell, Gareth (Gower)





Wareing, Robert N.
Tellers for the Ayes:


Welsh, Michael (Doncaster N)
Mr. Frank Haynes and


Wise, Mrs Audrey
Mr. Frank Cook.




NOES


Aitken, Jonathan
Ground, Patrick


Alexander, Richard
Grylls, Michael


Alison, Rt Hon Michael
Gummer, Rt Hon John Selwyn


Amess, David
Hamilton, Hon Archie (Epsom)


Amos, Alan
Hamilton, Neil (Tatton)


Ashby, David
Hanley, Jeremy


Aspinwall, Jack
Hargreaves, A. (B'ham H'll Gr')


Baker, Nicholas (Dorset N)
Hargreaves, Ken (Hyndburn)


Baldry, Tony
Harris, David


Batiste, Spencer
Hayes, Jerry


Bennett, Nicholas (Pembroke)
Hayhoe, Rt Hon Sir Barney


Benyon, W.
Hayward, Robert


Bevan, David Gilroy
Heddle, John


Blackburn, Dr John G.
Hicks, Mrs Maureen (Wolv' NE)


Bonsor, Sir Nicholas
Hordern, Sir Peter


Boswell, Tim
Howarth, Alan (Strat'd-on-A)


Bottomley, Peter
Howarth, G. (Cannock &amp; B'wd)


Bottomley, Mrs Virginia
Howell, Rt Hon David (G'dford)


Bowden, Gerald (Dulwich)
Howell, Ralph (North Norfolk)


Bowis, John
Hughes, Robert G. (Harrow W)


Brazier, Julian
Hunt, David (Wirral W)


Bright, Graham
Hunt, John (Ravensbourne)


Brooke, Rt Hon Peter
Hunter, Andrew


Brown, Michael (Brigg &amp; CI't's)
Irvine, Michael


Bruce, Ian (Dorset South)
Jack, Michael


Burns, Simon
Janman, Tim


Burt, Alistair
Johnson Smith, Sir Geoffrey


Butler, Chris
Jones, Robert B (Herts W)


Butterfill, John
Jopling, Rt Hon Michael


Carlisle, Kenneth (Lincoln)
Knapman, Roger


Carrington, Matthew
Knight, Dame Jill (Edgbaston)


Cash, William
Lawrence, Ivan


Chope, Christopher
Lee, John (Pendle)


Clark, Dr Michael (Flochford)
Leigh, Edward (Gainsbor'gh)


Clarke, Rt Hon K. (Rushcliffe)
Lennox-Boyd, Hon Mark


Coombs, Anthony (Wyre F'rest)
Lester, Jim (Broxtowe)


Coombs, Simon (Swindon)
Lloyd, Peter (Fareham)


Cope, Rt Hon John
Lord, Michael


Cran, James
Lyell, Sir Nicholas


Currie, Mrs Edwina
Macfarlane, Sir Neil


Curry, David
MacGregor, Rt Hon John


Davis, David (Boothferry)
Maclean, David


Day, Stephen
McLoughlin, Patrick


Devlin, Tim
McNair-Wilson, Sir Michael


Dorrell, Stephen
McNair-Wilson, P. (New Forest)


Dover, Den
Mans, Keith


Durant, Tony
Maples, John


Dykes, Hugh
Marshall, John (Hendon S)


Emery, Sir Peter
Martin, David (Portsmouth S)


Evennett, David
Maude, Hon Francis


Fairbairn, Sir Nicholas
Mayhew, Rt Hon Sir Patrick


Fallon, Michael
Mellor, David


Favell, Tony
Meyer, Sir Anthony


Fenner, Dame Peggy
Miller, Sir Hal


Field, Barry (Isle of Wight)
Mills, Iain


Fishburn, John Dudley
Mitchell, Andrew (Gedling)


Forman, Nigel
Mitchell, David (Hants NW)


Forsyth, Michael (Stirling)
Moate, Roger


Forth, Eric
Moss, Malcolm


Fox, Sir Marcus
Moynihan, Hon Colin


Franks, Cecil
Neale, Gerrard


Freeman, Roger
Nelson, Anthony


Gale, Roger
Neubert, Michael


Garel-Jones, Tristan
Nicholls, Patrick


Gill, Christopher
Nicholson, David (Taunton)


Goodhart, Sir Philip
Onslow, Rt Hon Cranley


Goodson-Wickes, Dr Charles
Paice, James


Gorman, Mrs Teresa
Patnick, Irvine


Gow, Ian
Pawsey, James


Greenway, Harry (Ealing N)
Peacock, Mrs Elizabeth


Greenway, John (Ryedale)
Porter, David (Waveney)


Gregory, Conal
Portillo, Michael


Griffiths, Peter (Portsmouth N)
Powell, William (Corby)


Grist, Ian
Price, Sir David






Raffan, Keith
Spicer, Sir Jim (Dorset W)


Ridley, Rt Hon Nicholas
Spicer, Michael (S Worcs)


Ridsdale, Sir Julian
Stern, Michael


Roe, Mrs Marion
Stewart, Andy (Sherwood)


Rost, Peter
Stradling Thomas, Sir John


Rowe, Andrew
Taylor, John M (Solihull)


Ryder, Richard
Thurnham, Peter


Sainsbury, Hon Tim
Vaughan, Sir Gerard


Shaw, David (Dover)
Waddington, Rt Hon David


Shaw, Sir Michael (Scarb')
Wheeler, John


Shelton, William (Streatham)
Widdecombe, Ann


Shephard, Mrs G. (Norfolk SW)



Shepherd, Colin (Hereford)
Tellers for the Noes:


Sims, Roger
Mr. David Heathcoat-Amory


Skeet, Sir Trevor
and


Smith, Tim (Beaconsfield)
Mr. Tom Sackville.


Speed, Keith

Question accordingly negatived.

Schedule 2 agreed to.

Clauses 4, 5, 6 and 7 ordered to stand part of the Bill.

New Clause 1

ADJUSTMENT OF BLOCK GRANT

`(1) In relation to the years beginning in 1987 and 1988 if it appears to the Secretary of State that the aggregate amount of block grant to which local authorities would be entitled in accordance with the Rate Support Grant Report or any supplementary report for the year differs from the aggregate amount available for that grant in that year he shall adjust the amount payable to each authority (whether by increasing or reducing it) so as to reconcile those aggregate amounts.
(2) An adjustment under this section may be made in accordance with principles applicable to all local authorities.
(3) Section 1(1) to (4) of the Rate Support Grants Act 1987 shall not have effect for the years beginning in 1987 and 1988.'.—[Mr. Rooker.]

Brought up, and read the First time.

Mr. Rooker: I beg to move, That the clause be read a Second time.
It may help hon. Members who have come late to this Committee to know that this is a Second Reading debate not just on the new clause but on the Bill. The consequence of the new clause would be the expenditure of £500 million, just as the consequence of the Bill would be to cut from local authorities £500 million that they could reasonably have expected to receive. I shall not repeat my Second Reading speech, although I have it here and I could be tempted—

Sir Peter Emery: Circulate it.

Mr. Rooker: Perhaps I should do that.
I shall repeat a couple of points about the £500 million and then deal with an item that I did not mention on Second Reading. The thrust of the new clause is to require the Secretary of State to distribute all the block grant provided for in the rate support grant settlements. Hon. Members on both sides of the Committee and those in local government know that the House has approved rate support grant settlements.
The effect of the Bill is to reduce by £500 million the money that will be paid to local authorities. We think that that sum should be distributed to local government, and that is the thrust of the new clause. The evidence tells us that not all the £500 million would have been paid out and that there would have been a holdback, but, as I said on Second Reading, the local authorities have agreed to split the difference. They would settle for £250 million of the

holdback being distributed to them in 1988–89. That is a firm proposal by the authorities to the Government, and it has not been met with a considered response.
The Government might respond to the new clause by saying that the powers under clause 1(9) permit the Secretary of State to distribute the additional grant, but that would be a discretionary act. The new clause would make the distribution mandatory. The Government have said, in effect, "This is rough justice. We have fixed a date. It will be tough for the losers but good luck for the gainers." It is alleged that the results of the rough justice in 1988–89 might be compensated for in 1989–90, for the Government have said that all the grant will be distributed in that year. That merely reinforces the local authority view that the Government had no intention in 1987–88 and 1988–89 of distributing the full amount of block grant that had been voted by Parliament to support local authorities. I emphasise that the £500 million has already been voted by the House. Authorities had a reasonable expectation that they would receive the money.
I said on Second Reading that this is not a party political matter when it comes to losers. In 1988–89, Conservative-controlled authorities stand to lose £134 million, Labour-controlled authorities £157 million, minor party-controlled authorities £4 million and independent authorities £3 million. The authorities that do not have an overall party control will lose the substantial sum of £210 million. The joint boards will lose £17 million. Those are the figures for one year, but the Bill applies to three years. On Second Reading, I concentrated in part of my speech—this would not have been realised by those who read the press reports the following day—on the effect of the Bill on the police authorities, which will be subject to substantial potential losses. I spoke of an overall loss of £18 million.
It may be said that we know what we mean, but not everyone will understand that the transport authorities come within the terms of the Bill.

Mr. Gummer: The hon. Gentleman referred on an earlier occasion to the sum that he claimed the police authorities would lose. He did not mention that they could gain that sum only by making savings that would amount to £30 million. I ask him to tell the House of the savings that the transport authorities would have to make if they were to gain the grant that he is now asking us to put into the system.

Mr. Rooker: To the best of my knowledge, none of the police authorities has been accused of engaging in creative accounting. No Minister has said that they have been doing what it is alleged that local authorities have been doing. Indeed, it is true that some authorities have engaged in what is described as creative accounting, but that is not illegal. Of course, that has upset Ministers, which in turn has caused their rigidity over the dates of 6 and 7 July.
I do not want to go back to the police, but the Northumbria police authority, which is one of those special authorities that one can identify, made representations late in September that, because of significant budget problems experienced by the authority in 1988–89, efforts were made to reduce the outturn expenditure in 1987–88, with the intention of increasing block grant entitlement and thereby securing a greater level of balances. That is important for bobbies on the beat in Northumbria. As a result of the savings achieved—because it did not fully realise what the Government were going to do—this


authority has lost approximately £400,000 in grant. I alluded to the fact that this authority stood to lose more than £400,000 and I could show exactly how that £400,000 was lost.
11.45 pm
I shall use my figures and, if the Minister does not like them, it is up to him to give figures to rebut them. Police authorities are adversely affected by the Bill, as indeed are the transport authorities. Not all of them are affected negatively, but I intend to concentrate on one that is especially affected negatively.

Mr. Gummer: I want to clear up what I believe is a mistake in the hon. Gentleman's mind. He talks about this £500 million, but in order to get that money it would mean considerable savings of £1·2 billion—savings which local authorities would not produce, have not produced and could not, in his view, produce, although I believe that they could. The hon. Gentleman suggested to the Committee that money was being taken from police authorities, but he never suggested how they would make a saving of £30 million in order to get that money. In fairness, he should explain that. If he does not want to do so for the police authorities, perhaps he could tell us how much, in aggregate, transport authorities would have to save to receive the extra grant that he says is being taken from them.

Mr. Rooker: All that intervention proves is what I said a few moments ago: the Government never intended that this money voted by Parliament should go to the authorities. The Minister is saying that it is impossible for them to save and cut their budgets to get any of the £500 million. I repeat that that £500 million is not new money. The House approved that that money should go to local authorities, whereas the Minister has just said that it will be impossible for them ever to receive it. Of course, they were never intended to receive it, but no Minister—not this Minister, because it was not his responsibility—ever had the guts to stand at the Dispatch Box and say that the holdback was not available. The House can approve what it likes for local government, but the £500 million was not available. That being so, local authorities would not have had any expectation of receiving the money. It is fine that the Minister's view is that it is impossible for them to get it, but all that shows is that the local authorities were right when they believed that the intention was for them to be short-changed.
I want to concentrate on the West Midlands transport authority. I make no apology for doing so, because it is the first time in today's proceedings that I have referred to the Birmingham area in which my constituency is situated. I regret that the authority leadership was not informed until about Thursday of last week, because of the communication problem which is caused by having joint boards where there are lead authorities for a function covering, in this case, seven different authorities.
Communication cannot be that good when Bills are introduced in the fag end of a parliamentary Session and rollercoastered through without proper scrutiny. I make no complaints about the West Midlands passenger transport authority, or the lead authority on transport in the West Midlands, but what I am faced with at present is the fact that, because of the Bill, the West Midlands passenger transport authority stands to lose £8·9 million in grant over three years. It is not all to be lost in one year,

but over the period 1986–87, 1987–88 and 1988–89. It reasonably expected to receive that money. West Midlands is by far the biggest loser. I understand that the Greater Manchester authority will gain about £5 million.
Approximately 50 per cent. of the budget of the West Midlands transport authority is taken up by concessionary fares—£31 million covers concessionary fares for pensioners and approximately £5 million covers concessionary fares for schoolchildren. Therefore, £36 million out of a budget of £65 million is taken up by concessionary fares. In the West Midlands county area, not the regional area, 400,000 pensioners enjoy the benefit of concessionary fares. Because of the unexpected loss of grant, for which the authority has been unable to budget, and without the ability to change its planned budget—it cannot put up fares—it will be impossible to maintain the concessionary fare structure in the west midlands.
I am not familiar with Suffolk, but I suspect that pensioners in that region do not get concessionary fares.

Mr. Gummer: They do.

Mr. Rooker: Generally speaking, there are no concessionary fares for pensioners in the Tory shires. Such fares are mostly available in the big cities only, and they represent a basic difference between Labour and Conservative control. I am pleased that such a progressive move has been taken in Suffolk and I can only assume that there is no overall control of that authority.

Mr. Gummer: It is strongly Conservative.

Mr. Rooker: Well, that is fine.
Why is the Minister introducing a Bill that will deprive my constituents and those of my colleagues who represent the west midlands of their free bus passes? It cannot be denied that, when the Secretary of State began to legislate on transport, we always said that concessionary fares were at risk. We said that, under the new transport regime, it would be impossible for an authority to maintain concessionary fares. We were told that it would be okay, and that we were running scare stories. If so, why has the West Midlands authority been singled out? No other transport authority has been affected in this way.
It is not a scare story to say that pensioners could potentially suffer. I am not saying that such fares will be abolished; their provision could be cut in half, such fares could operate one day a week or in the mornings only. There are enough bureaucratic restrictions on bus passes as it is. They were introduced in Birmingham some 30 years ago in the teeth of opposition from the then Conservative Government—Birmingham pioneered concessionary fares for pensioners.
There are pensioner Members of this House who use their passes on London Transport and, of course, they receive salaries. They are the very people whom the Chancellor is after with his new-found desire to target any concession received by a pensioner that is not already means-tested. In the west midlands, in common with elsewhere, those fares are not means-tested. As such, they are easy prey for the Government.
It would be unacceptable if there were any move agai nst concessionary fares in the west midlands, whether by cutting the hours or reducing the days on which they operate. It must be said that such a move would not be the fault of the West Midlands passenger transport authority,


West Midlands Travel, or of any of the seven metropolitan district councils in the west midlands. The fault lies with the Bill and the Tory Government.

Mr. Gummer: The fact is that, if the West Midlands passenger transport authority had produced a budget at the correct level in the first place, it would have lost nothing. Indeed, if all authorities had produced in the first place the budgets that they should have produced, all £500 million would have been available to them, but the hon. Member for Birmingham, Perry Barr (Mr. Rooker) tried to suggest that there might be a means whereby, in the past few weeks, by adjustments of one sort or another, by changing the date or something similar, and not having produced sensible budgets or returned sensible estimates to the Department of the Environment, the £500 million could have been saved. The hon. Gentleman has been rumbled. If he had not moved the new clause, he would not have been rumbled so clearly.
In the debate last Monday, the hon. Gentleman said that, for example, Bradford would have been able to get a considerable extra amount—£3·7 million of grant. He did not mention that the only way in which the council could so so was if it could budget for a £20 million cut in its expenditure. That would have been possible and the council could have done that sensibly if it had budgeted sensibly in previous years and, indeed, in the budget for this year. But the hon. Gentleman suggested that the council could have made that difference in the few weeks over the edge of the date that we were talking about. Therefore, the hon. Gentleman applied hypothetical figures to a hypothetical situation and produced a wrong answer.
Today the hon. Gentleman is saying that, if there are any cuts in the services provided by the West Midlands passenger transport authority—he admits that others will not be in that position—people must blame the Bill. That is not so. They must blame the poor budgeting of that transport authority. If it had run the services according to needs, it would have been able to obtain the maximum grant and not lose any grant.
The hon. Gentleman cannot now say that, although the people have not made the savings and did not have the savings in the budget, and although they did not try to do what they were supposed to do, they must now have the money as well. We know why the hon. Gentleman says that. It is because his answer to everything is more money. But who pays? Many of the very pensioners whom the hon. Gentleman wants to have the concessionary fares; many of the people who are asked to pay rates and taxes are poorer than some of those who have the concessionary fares. Sometimes it is worth remembering that those fares are spread across a large number of people, distinguished from the rest of the population merely by their age. But that was decided by many of the hon. Gentleman's friends, and no doubt some of my friends take the same view. It is a reasonable decision, but they cannot say that it is the Bill's fault rather than that of the authority's budgeting.
In the new clause, the hon. Gentleman shows that he wants to insist that authorities which, through lack of prudent budgeting, were not able to see the savings come through earlier, should somehow still get the taxpayers'

money that they could have got, had they budgeted from the beginning, and kept to that budget in the way that the Government propose.

Mr. Terry Davis: Will the Minister give way?

Mr. Gummer: I shall give way in a second, although the hon. Member—[Interruption]—has not been here during our debates.
I say to the hon. Member for Perry Barr that that was not a proper way in which to end the debate. If one looks at the overall settlement, at the supplementary figures, which are now being discussed, and at the 9 per cent. increase in the grant that will be available in future, one sees that there is no question of the taxpayer or the Treasury making a profit. I remain convinced of that. It would not be proper for us to pay local authorities sums that they have not earned by sensible budgeting.

Mr. Terry Davis: I thought that the Minister referred to the hon. Member for Bromsgrove. I have no idea whether the hon. Member for Bromsgrove (Sir H. Miller) has been present during the debate. I do not represent Bromsgrove; I represent part of Birmingham. Does the right hon. Gentleman accept that hon. Members are entitled to come to debates on clauses that interest them?
I have been in the Chamber throughout the debate on the new clause. It interests me very much because, like my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker), I represent part of the west midlands and my constituents will be affected if the West Midlands passenger transport authority loses £8·9 million as a result of the Bill. The Minister told us that the West Midlands PTA would lose that money only because it has not engaged in what he described as prudent budgeting and has failed to put forward a sensible budget. In the Minister's view, what would have been a sensible budget for the West Midlands PTA to adopt, in order not to lose the £8·9 million?

12 midnight

Mr. Gummer: That is a decision for the PTA. All I am saying is that it did not put forward a budget which would result in the accretion of grant that it wanted. It decided that it did not want to do it that way. That was a perfectly reasonable thing for the PTA to do. However, it cannot now turn round and say that it wants that sum of money irrespective of the fact that it has not met the requirements for it.
I did not mention Bromsgrove. I am perfectly well aware that the hon. Member for Birmingham, Hodge Hill (Mr. Davis) is not the hon. Member for Bromsgrove. He was once, and he lost the seat. The hon. Member for Hodge Hill might consider it very interesting that in this debate the only people who have discussed the figures are the hon. Members who represent the one passenger transport authority which loses by the date under discussion. Earlier, Opposition Members suggested other dates. However, I must state that other PTAs gain by the date. The date cannot be construed as an attack on PTAs in general or on concessionary fares.
The new clause is not a suitable way of asking the taxpayer to foot a bill which he would not be able to foot except where local authorities had met the requirements


that were perfectly clear at the beginning of the year. The West Midlands PTA decided in its wisdom not to meet those requirements.

Mr. Tony Banks: I heard the Minister say that the local authorities were losing money because they had not made realistic budgets. That is unfair. I had hoped that we would hear answers during the debate on new clause 1 to the points raised on Second Reading, when we explained that many authorities were losing out badly because of the dates.
It is not good enough for the Minister to say that the authorities did not get their figures in on time or that in his opinion the budgets were unrealistic and therefore it is just tough luck on those authorities. The Minister must know—although he was not personally responsible—that the Department of the Environment has changed the rules, regulations and dates continually.
It has been impossible for many years for local authorities to have budgets that they can present in an orderly fashion to elected members and then ensure that they applied for the budgetary year in question. It is not surprising that at the end of a particular financial year a local authority would look at its budgetary outturn and discover that it was different from the estimates. Therefore authorities have always been able to come back to the Government and point that out. Now, with a set date of 6 July, a number of authorities will lose very badly, and I explained to the Parliamentary Under-Secretary of State on Second Reading that that was not fair.
My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) referred to the West Midlands passenger travel authority. A number of other authorities will lose out badly because of the date that has been set by the Government. I refer once more to the examples that I quoted on Second Reading of Greenwich, Southwark and Brent. I will not go through all the facts again, but I hope that the Minister will respond as he did to the points made by my hon. Friend the Member for Perry Barr about the police authorities, and consider the London authorities.
Greenwich approved its account for 1986–87 on 6 July, but did not notify the Department of the Environment. The DOE assumed that Greenwich spent £102 million when it actually spent only £93 million, which means that the council will lose £1·2 million in grant. I do not know whether the Minister thinks that local authorities that do not fulfil all the provisions of their budgets by an arbitrary date are at fault. If he approaches the matter like that, where is the order in financial accounting for local authorities? How can they possibly budget sensibly under such conditions?
As I said to the Minister on Second Reading, he should be prepared to look sympathetically at local authorities that will clearly lose under the provisions of the Bill. I understand, but perhaps the Minister will tell me if I am wrong, that local authorities made representations to the Secretary of State to the effect that, since they will not be able to recoup grant holdback by reducing expenditure, £250 million of the holdback in 1988–89 should be distributed. Has the Secretary of State seriously considered the proposals put forward? If he has not, the local authorities were wasting their time in putting them forward. There is not much point in us trying to make a case if the Secretary of State does not listen.
The Minister must know, even in the short time that he has been responsible for the Bill, that there will be some

injustices. New clause I at least gives him an opportunity to redress some of those. I hope that even at this late stage he will be prepared to change his mind.

Mr. Rooker: Obviously, the Minister has a closed mind. I repeat that Parliament has approved the money, so it is not a question of money having to be raised from taxpayers. Parliament has already approved the rate support grant settlement. Prior to 1987–88, all the block grant money was paid out. New clause 1 seeks to introduce what was known as grant recycling. It is only in 1987–88 and 1988–89 that the Government have separated the block grant so that there is a provision in the settlement in the main year of £9·471 billion. The amount that they distributed on the basis of the estimates was £8,960 billion, leaving grant held back by the Treasury or the Department of £511 million. Until two years ago, in the normal course of events that would have been recycled.
All we are saying is that the new clause is justified on the grounds that the authorities will not be able to recoup some or all of the grant holdback by reducing the expenditure that would normally feed through into the grant calculations. That was what normally happened, but the process is no longer available to the authorities. Anyone would think, to hear the Government, that local authorities keep overspending on their estimates, but that is not true. In 1984–85, the actual expenditure of local authorities was £98 million lower than estimated. In 1985–86, the expenditure was £431 million lower than estimated and in 1986–87 it was £285 million lower than estimated.
Local authorities can justifiably claim a long run of years during which the actual outturn, which is never known until the end of the year, was lower than the estimated expenditure. All that the authorities want is credit for that.
I repeat what I said about the West Midlands passenger transport authority. Given the way that the Bill was brought in, the announcement in July and the rigidity with which Ministers have acted, it is clear that they have not been prepared to countenance any change in the Bill. Clearly the Bill has not been scrutinised as it would have been in a Committee upstairs. Earlier in the debate, the Minister let the cat out of the bag. Quite clearly, it was never intended that the £500 million should go to local authorities, police authorities or transport authorities. It is clearly going to go back to the Treasury, which is what was intended in the first place.

Question put, That the clause be read a Second time:—

The Committee divided: Ayes 59, Noes 155.

Division No. 474]
[12.09 am


AYES


Banks, Tony (Newham NW)
Davis, Terry (B'ham Hodge H'l)


Barnes, Harry (Derbyshire NE)
Dixon, Don


Beckett, Margaret
Evans, John (St Helens N)


Beith, A. J.
Faulds, Andrew


Bennett, A. F. (D'nt'n &amp; R'dish)
Foster, Derek


Bradley, Keith
Galbraith, Sam


Brown, Ron (Edinburgh Leith)
Golding, Mrs Llin


Buckley, George J.
Gordon, Mildred


Campbell, Menzies (Fife NE)
Henderson, Doug


Clay, Bob
Howarth, George (Knowsley N)


Clelland, David
Hughes, John (Coventry NE)


Cohen, Harry
Hughes, Sean (Knowsley S)


Cryer, Bob
Hughes, Simon (Southwark)


Cunliffe, Lawrence
Kirkwood, Archy


Cunningham, Dr John
Leadbitter, Ted


Davies, Ron (Caerphilly)
Lewis, Terry






Livingstone, Ken
Skinner, Dennis


Lloyd, Tony (Stretford)
Spearing, Nigel


Lofthouse, Geoffrey
Steel, Rt Hon David


McAvoy, Thomas
Taylor, Matthew (Truro)


Mahon, Mrs Alice
Thompson, Jack (Wansbeck)


Michael, Alun
Turner, Dennis


Michie, Bill (Sheffield Heeley)
Wall, Pat


Mowlam, Marjorie
Wareing, Robert N.


Nellist, Dave
Welsh, Michael (Doncaster N)


O'Brien, William
Wilson, Brian


O'Neill, Martin
Wise, Mrs Audrey


Pike, Peter L.



Primarolo, Dawn
Tellers for the Ayes:


Redmond, Martin
Mr. Frank Haynes and


Rooker, Jeff
Mr. Frank Cook.


Short, Clare





NOES


Alexander, Richard
Greenway, Harry (Ealing N)


Alison, Rt Hon Michael
Greenway, John (Ryedale)


Amess, David
Gregory, Conal


Amos, Alan
Griffiths, Peter (Portsmouth N)


Ashby, David
Grist, Ian


Aspinwall, Jack
Ground, Patrick


Baker, Nicholas (Dorset N)
Grylls, Michael


Baldry, Tony
Gummer, Rt Hon John Selwyn


Batiste, Spencer
Hamilton, Hon Archie (Epsom)


Beaumont-Dark, Anthony
Hamilton, Neil (Tatton)


Bennett, Nicholas (Pembroke)
Hanley, Jeremy


Bevan, David Gilroy
Hargreaves, A. (B'ham H'll Gr')


Blackburn, Dr John G.
Hargreaves, Ken (Hyndburn)


Bonsor, Sir Nicholas
Harris, David


Boswell, Tim
Hayes, Jerry


Bottomley, Peter
Heathcoat-Amory, David


Bottomley, Mrs Virginia
Heddle, John


Bowden, Gerald (Dulwich)
Hicks, Mrs Maureen (Wolv' NE)


Bowis, John
Hordern, Sir Peter


Brazier, Julian
Howarth, Alan (Strat'd-on-A)


Bright, Graham
Howarth, G. (Cannock &amp; B'wd)


Brooke, Rt Hon Peter
Howell, Rt Hon David (G'dford)


Brown, Michael (Brigg &amp; CI't's)
Howell, Ralph (North Norfolk)


Burns, Simon
Hughes, Robert G. (Harrow W)


Burt, Alistair
Hunt, David (Wirral W)


Butterfill, John
Hunt, John (Ravensbourne)


Carlisle, Kenneth (Lincoln)
Irvine, Michael


Carrington, Matthew
Jack, Michael


Cash, William
Janman, Tim


Chope, Christopher
Johnson Smith, Sir Geoffrey


Clark, Dr Michael (Rochford)
Jones, Robert B (Herts W)


Clarke, Rt Hon K. (Rushcliffe)
Knapman, Roger


Coombs, Anthony (Wyrg F'rest)
Knight, Dame Jill (Edgbaston)


Coombs, Simon (Swindon)
Lawrence, Ivan


Cran, James
Leigh, Edward (Gainsbor'gh)


Currie, Mrs Edwina
Lennox-Boyd, Hon Mark


Davis, David (Boothferry)
Lester, Jim (Broxtowe)


Day, Stephen
Lord, Michael


Devlin, Tim
Lyell, Sir Nicholas


Dorrell, Stephen
Macfarlane, Sir Neil


Dover, Den
MacGregor, Rt Hon John


Durant, Tony
Maclean, David


Dykes, Hugh
McLoughlin, Patrick


Emery, Sir Peter
McNair-Wilson, Sir Michael


Fairbairn, Sir Nicholas
Mans, Keith


Favell, Tony
Maples, John


Fenner, Dame Peggy
Marshall, John (Hendon S)


Field, Barry (Isle of Wight)
Martin, David (Portsmouth S)


Fishburn, John Dudley
Mayhew, Rt Hon Sir Patrick


Forman, Nigel
Mellor, David


Forsyth, Michael (Stirling)
Meyer, Sir Anthony


Forth, Eric
Miller, Sir Hal


Fox, Sir Marcus
Mills, Iain


Franks, Cecil
Mitchell, David (Hants NW)


Freeman, Roger
Moate, Roger


Gale, Roger
Moss, Malcolm


Garel-Jones, Tristan
Moynihan, Hon Colin


Gill, Christopher
Nelson, Anthony


Goodhart, Sir Philip
Neubert, Michael


Goodson-Wickes, Dr Charles
Nicholls, Patrick


Gow, Ian
Nicholson, David (Taunton)


Gower, Sir Raymond
Onslow, Rt Hon Cranley





Paice, James
Shephard, Mrs G. (Norfolk SW)


Patnick, Irvine
Shepherd, Colin (Hereford)


Peacock, Mrs Elizabeth
Sims, Roger


Porter, David (Waveney)
Smith, Tim (Beaconsfield)


Portillo, Michael
Speed, Keith


Powell, William (Corby)
Spicer, Sir Jim (Dorset W)


Raffan, Keith
Stern, Michael


Renton, Tim
Stewart, Andy (Sherwood)


Ridley, Rt Hon Nicholas
Stradling Thomas, Sir John


Roe, Mrs Marion
Thurnham, Peter


Rost, Peter
Waddington, Rt Hon David


Rowe, Andrew
Wheeler, John


Ryder, Richard
Widdecombe, Ann


Sackville, Hon Tom



Sainsbury, Hon Tim
Tellers for the Noes:


Shaw, David (Dover)
Mr. Michael Fallon and


Shaw, Sir Michael (Scarb')
Mr. John Taylor.


Shelton, William (Streatham)

Question accordingly negatived.

Bill reported, without amendment.

Motion made, and Question proposed, That the Bill be now read the Third time.

Mr. Tony Banks: I am glad to have caught your eye, Mr. Deputy Speaker. There was not a great deal of competition on this occasion, but I believe that it is necessary to keep Ministers here as they probably do not have anything more useful to do than listen to my speech.
It is a great pity that, despite our attempts in Committee to persuade the Minister to accept our amendments, he remained implacable and refused to see the justice of our case. He must know that a great deal of injustice will come about as a result of the Bill, that arbitrary dates have been set and that some local authorities will gain a great deal, although we have not made great play of that tonight. It is a case of good luck to those who gain, but we are most concerned with those who, unfortunately, lose. In local government, resources are hard to come by and if any authority loses, that must be a matter of regret for Opposition Members. A number of local authorities in Greater London are losing. Greenwich, Southwark and Brent, all of which I mentioned on Second Reading and on Report, will lose as a result of the Bill.
As the Minister has not seen fit to change his mind or the terms of the Bill, in the light of our amendments, our opposition on Second Reading should be sustained on Third Reading. We are all a little older and Conservative Members are none the wiser. A Bill that we opposed on Second Reading has simply moved nearer the statute book and, therefore—I am sure that Opposition Front Bench Members agree with me on this occasion—we must oppose the Bill on Third Reading.
The Government argue that the Bill paves the way for the poll tax. It does so by breaking the link between grant and expenditure and, in the process, ends resource equalisation. It starts the process whereby the Government believe that no authority is any richer or any poorer than any other authority. The Bill changes the rules retrospectively, as we have always maintained. Many authorities will suffer grant losses as a result through no fault of their own, merely because, once again, the Government have changed the rules.
I do not know whether the Minister has any local government experience. Perhaps he could indicate by moving some part of his body; any part will do, preferably


his head. I take it, to judge by his somnambulant position, that he is either dead or has never served in local government—

Mr. Gummer: I had the pleasure of serving on the Inner London education authority.

Mr. Banks: I am sure that it was not a pleasure for the Minister, or for the teachers, pupils and others in the authority.
Let us assume that the Minister did sterling service when he was on ILEA. That must have been many years ago, when central Government did not interfere in the affairs of local authorities in the way in which this Government have done since 1979, since when interference has escalated. I had hoped for a response from the Minister to the point I made when discussing new clause 1, which was that these days it is virtually impossible for any borough treasurer or finance director to produce the sort of budget that council members—or the Department of the Environment, come to that—would want to receive. Expenditure after a budget has been set can never be forecast because of the rule changes that the Government keep introducing. Interest rates, regulations passed in this place and other factors combine to make certainty impossible.
In these circumstances, it is unrealistic of the Minister to blame local authorities for not being able to keep to budgets agreed at the beginning of the year. The Minister knows that that is unrealistic, yet he has worked on that assumption throughout proceedings on the Bill, which seems grossly unfair.
The Bill contains discretionary powers that the Minister may exercise, so I repeat the case even at this late stage: some local authorities, through no fault of their own, will lose badly under the Bill. The penalty for that will be paid by ratepayers. This is typical of the arrogant way in which the Government treat local authorities.
Collective and individual grant penalties will remain in place, even if no longer justified—[HON. MEMBERS: "Reading."] At least I can still read at this late stage—a facility which I doubt whether many Conservative Members could exercise.
Grant calculation for 1989–90 will be arbitrary and based on no principle apart from the need to prevent the Government from losing court cases.
The Bill is as bad as it was on Second Reading. The Minister refused to accept our reasoned amendments. I urge all my hon. Friends to vote against Third Reading.

Mr. Pike: Having sat through most of the debates last Monday and today, I believe that there is general recognition of the need for some sort of Bill to take us through the transitional period from the old rate support grant to the new poll tax. We oppose the new tax, but accept the need for a transitional arrangement.
I shall vote against Third Reading because I wholly oppose the Government's handling of the Bill. There was no reason for pushing it through at the end of this parliamentary Session. It was quite wrong of the Government to do that. Legislating in unnecessary haste often causes mistakes. There was no need for this Bill at this time. It could have been presented and debated in the proper manner at the start of the new Session, when all the relevant factors could have been discussed.
Opening the debate last Monday, the Minister said that this may not be the best way forward or the best solution to our problems, but that the Government thought it the right one. He also accepted that the Bill involved rough justice. But rough justice is indefensible: we need a Bill that is fair, and seen to be fair.
There may well be faults with the Bill. We recognise that the Government will use their majority to force through the Third Reading, but if there are faults the Government will have to return to the House during the next Session with different proposals.
The track record of the Secretary of State for the Environment shows how often he is wrong. It was the same when he was Secretary of State for Transport. Time and again he had to return to the House with retrospective legislation, often because he had been proved wrong in the courts. The Government may have to admit that they have made mistakes in the Bill and that they were wrong to push it through at this late stage.
We could have dealt with the Bill in a few weeks and made sure that everything in it provided a proper protection for local government. Like my hon. Friends, I still believe in local government—unlike Conservative Members, who want only to kill and knock nails in the coffin of local government.

Mr. Frank Haynes: I want to speak on Third Reading—[HON. MEMBERS: "Oh no."] You will be aware, Mr. Deputy Speaker, that I have been in the Chamber for most of the debate, although for most of that time I was on duty and did not have the opportunity to say a few words. I shall be brief—[Interruption.] This is not a filibuster.
My hon. Friends the Members for Newham, North-West (Mr. Banks) and for Burnley (Mr. Pike) made true statements about this unfair Bill. Indeed, there have been many unfair Bills since this Government took office. The Bill does not allow local authorities to represent the people in their areas and to provide the necessary services. There are to be yet more cuts in local government.
I heard the Minister talking about the Bradford Conservatives and what they will do in future. They have set out their stall. The Minister is a loser—

Mr. Patnick: A what?

Mr. Haynes: He is a loser. He came to Nottingham last week during the by-election—

Mr. Tony Banks: Tell us what happened.

Mr. Haynes: I will. It was a Tory seat, but on Thursday we won it and took control of the city council. We will right many of the wrongs done by the Tories. The Nottingham Tories intended to do the same as the Bradford Tories.

Mr. Banks: I congratulate my hon. Friend on the Nottingham result, which is wonderful news and, no doubt, is the prelude to much good news.
Is my hon. Friend aware that just over a week ago in the London borough of Newham the Labour party again won two by-elections? The council has now returned to having 59 Labour councillors and one Democrat. It is a Tory-free zone.

Mr. Deputy Speaker (Mr. Harold Walker): Order. Let us get back to the Third Reading of the Bill.

Mr. Haynes: I am speaking to the Bill, Mr. Deputy Speaker. That comment was made by my hon. Friend the Member for Newham, North-West.
Things are changing. There is a clear sign in Nottingham and Newham that the people realise what is going on. There is no doubt that Govan will prove another point. [Interruption.] The Minister is laughing. Last Thursday, we knocked the grin off his face, and we shall continue to do it time and again until the next general election, when the people of this country realise what the Government have done to local government. They have done it to my local authority, too. My local authority is fair. It tries to provide the proper services for the people it represents. But, by cutting back, that lot deny local government the right to provide proper services.
The other day, I told the Minister that we lose finance every time there is a pit closure. I do not care what he may say at the Dispatch Box. We are losing money because of the Government's policies. I blame the Chief Whip, too. I shall drag him into the argument, because he makes sure that his Tory colleagues are present to vote for the Government's policies. Why does he not let his colleagues go home if they wish to, so that we can win now and again? [Interruption.] I am conscious of the time. There is a fight on television at a quarter to 4.

Mr. Nicholas Baker: Hear, hear.

Mr. Haynes: The hon. Gentleman says, "Hear, hear." He told me that the fight was over in the fourth round, but it has not been held yet. However, the fight is on at a quarter to 4, and I aim to see it.
The important point is that the message is getting across to the people loud and clear. The Government have to go. They will go at the next general election. They can take the grins off their faces. Their grins will be knocked off. I say that quite sincerely. The Government's policies, particularly in relation to local government, are denying elected representatives the freedom to do the right thing on behalf of the people. The Government are cutting finance here, there and everywhere. They pour money into the pockets of the Tory rich. Tory local authorities look after Tory boroughs, but they do not look after Labour-controlled boroughs.
The Secretary of State makes me sick when he seriously criticises Labour-controlled local authorities. They are doing the right thing on behalf of the people. That lot are denying Opposition Members the right to do the right thing, and look after the people who need services.
I heard several of my hon. Friends talk about elderly people's homes in local authority areas. We in Labour-controlled local authorities are providing a first-class service for those who need it, particularly the elderly. They have made their contribution, and we should look after them properly. But the Chancellor of the Exchequer denies them their rights. [Interruption.] Conservative Members can laugh. I shall sit down in a minute. Those who are youngsters will be elderly one day. I am not far from retirement. You and I will draw the old-age pension, Mr. Deputy Speaker. I know that I am a little older than you. It is all right; do not get worried about it.

Mr. Deputy Speaker: Order. I hope that the hon. Gentleman will speak for himself and will not presume my future.

Mr. Haynes: I shall withdraw the comment about your future, Mr. Deputy Speaker, and stick to my own. But one or two more hon. Members—on the Conservative Benches as well—are coming up to retirement age, and they are going to enjoy that pension. I want to remind that lot over there that I paid for it, and so did the people who were being denied when the Chancellor stood at the Dispatch Box today. Those people bought their pensions, and the Chancellor should be coming to the Dispatch Box and doing right by them.
The elderly people of this nation have been through two wars, and they worked very hard in heavy industry, particularly the industry that I came from, the mining industry.

Mr. Deputy Speaker: Order. None of this seems to have much relevance to the Rate Support Grant Bill.

Mr. Haynes: With respect, Mr. Deputy Speaker, we are providing services in the community for elderly people, or are supposed to be. I am only adding a bit more about the Chancellor's denial of them at the Dispatch Box, and the way that the motley crew who sit on the Treasury Bench come to the Dispatch Box every now and again denying this, that and the other.
I am speaking on behalf of the people in my constituency, and my hon. Friends have been doing the same. But we did not hear a great deal of that from the other side of the Chamber. All that Conservative Members were doing was supporting the Minister. He was given a lesson or two upstairs when he was in the Department of Employment. I gave him one or two biblical lessons, which was a bit strange to him as a Member of the Synod. I tried very hard. The Minister has been given a lesson or two on the environment and a lesson or two on employment, and will continue to have lessons, but he does not listen. He ignores what he is told and ploughs on in his own sweet way, denying people their rights.
I am standing here asking for those rights, particularly for the people in the very low-income groups who really need it. The right hon. Gentleman stands at the Dispatch Box saying that they are the people he is going to help, but he and the other Ministers are denying them their rights to benefits and services.

Mr. Skinner: My hon. Friend is doing exceptionally well, but I remind him that the fight is on at a quarter to 4.

Question put, That the Bill be read the Third time.

The House divided: Ayes 142, Noes 46.

Division No. 475]
[12.42 am


AYES


Alexander, Richard
Bonsor, Sir Nicholas


Alison, Rt Hon Michael
Boswell, Tim


Amess, David
Bottomley, Peter


Amos, Alan
Bottomley, Mrs Virginia


Arnold, Tom (Hazel Grove)
Bowden, Gerald (Dulwich)


Ashby, David
Bowis, John


Baker, Nicholas (Dorset N)
Brazier, Julian


Baldry, Tony
Bright, Graham


Batiste, Spencer
Brooke, Rt Hon Peter


Beaumont-Dark, Anthony
Burns, Simon


Bennett, Nicholas (Pembroke)
Burt, Alistair


Bevan, David Gilroy
Butterfill, John


Blackburn, Dr John G.
Carlisle, Kenneth (Lincoln)






Carrington, Matthew
Janman, Tim


Chope, Christopher
Johnson Smith, Sir Geoffrey


Clark, Dr Michael (Rochford)
Jones, Robert B (Herts W)


Clarke, Rt Hon K. (Rushcliffe)
Knapman, Roger


Coombs, Anthony (Wyre F'rest)
Knight, Dame Jill (Edgbaston)


Coombs, Simon (Swindon)
Lawrence, Ivan


Cran, James
Lester, Jim (Broxtowe)


Currie, Mrs Edwina
Lord, Michael


Davis, David (Boothferry)
Lyell, Sir Nicholas


Day, Stephen
MacGregor, Rt Hon John


Devlin, Tim
Maclean, David


Dorrell, Stephen
McLoughlin, Patrick


Dover, Den
McNair-Wilson, Sir Michael


Durant, Tony
Mans, Keith


Dykes, Hugh
Maples, John


Emery, Sir Peter
Marshall, John (Hendon S)


Favell, Tony
Martin, David (Portsmouth S)


Fenner, Dame Peggy
Mayhew, Rt Hon Sir Patrick


Field, Barry (Isle of Wight)
Mellor, David


Fishburn, John Dudley
Meyer, Sir Anthony


Forman, Nigel
Miller, Sir Hal


Forsyth, Michael (Stirling)
Mills, Iain


Forth, Eric
Mitchell, David (Hants NW)


Freeman, Roger
Moate, Roger


Gale, Roger
Moss, Malcolm


Gill, Christopher
Moynihan, Hon Colin


Goodhart, Sir Philip
Nelson, Anthony


Goodson-Wickes, Dr Charles
Neubert, Michael


Gow, Ian
Nicholls, Patrick


Greenway, John (Ryedale)
Nicholson, David (Taunton)


Gregory, Conal
Onslow, Rt Hon Cranley


Griffiths, Peter (Portsmouth N)
Paice, James


Grist, Ian
Patnick, Irvine


Ground, Patrick
Peacock, Mrs Elizabeth


Grylls, Michael
Porter, David (Waveney)


Gummer, Rt Hon John Selwyn
Portillo, Michael


Hamilton, Hon Archie (Epsom)
Powell, William (Corby)


Hamilton, Neil (Tatton)
Raffan, Keith


Hanley, Jeremy
Ridley, Rt Hon Nicholas


Hargreaves, Ken (Hyndburn)
Roe, Mrs Marion


Harris, David
Rost, Peter


Hayes, Jerry
Rowe, Andrew


Heathcoat-Amory, David
Ryder, Richard


Heddle, John
Sackville, Hon Tom


Hicks, Mrs Maureen (Wolv' NE)
Sainsbury, Hon Tim


Hordern, Sir Peter
Shaw, David (Dover)


Howarth, Alan (Strat'd-on-A)
Shaw, Sir Michael (Scarb')


Howatlh, G. (Cannock &amp; B'wd)
Shelton, William (Streatham)


Howell, Rt Hon David (G'dford)
Shephard, Mrs G. (Norfolk SW)


Howell, Ralph (North Norfolk)
Shepherd, Colin (Hereford)


Hughes, Robert G. (Harrow W)
Sims, Roger


Hunt, David (Wirral W)
Smith, Tim (Beaconsfield)


Hunt, John (Ravensbourne)
Speed, Keith


Irvine, Michael
Spicer, Sir Jim (Dorset W)


Jack, Michael
Stern, Michael





Stewart, Andy (Sherwood)
Widdecombe, Ann


Stradling Thomas, Sir John



Thurnham, Peter
Tellers for the Ayes:


Waddington, Rt Hon David
Mr. John Taylor and


Wheeler, John
Mr. Michael Fallon.




NOES


Banks, Tony (Newham NW)
Lofthouse, Geoffrey


Barnes, Harry (Derbyshire NE)
McAvoy, Thomas


Beckett, Margaret
Mahon, Mrs Alice


Beith, A. J.
Michael, Alun


Bennett, A. F. (D'nt'n &amp; R'dish)
Michie, Bill (Sheffield Heeley)


Buckley, George J.
Nellist, Dave


Campbell, Menzies (Fife NE)
O'Brien, William


Clay, Bob
O'Neill, Martin


Clelland, David
Pike, Peter L.


Cohen, Harry
Primarolo, Dawn


Cryer, Bob
Redmond, Martin


Cunliffe, Lawrence
Rooker, Jeff


Cunningham, Dr John
Skinner, Dennis


Davies, Ron (Caerphilly)
Spearing, Nigel


Davis, Terry (B'ham Hodge H'l)
Steel, Rt Hon David


Dixon, Don
Taylor, Matthew (Truro)


Evans, John (St Helens N)
Turner, Dennis


Foster, Derek
Wall, Pat


Golding, Mrs Llin
Wareing, Robert N.


Henderson, Doug
Welsh, Michael (Doncaster N)


Hughes, John (Coventry NE)
Wise, Mrs Audrey


Hughes, Simon (Southwark)



Kirkwood, Archy
Tellers for the Noes:


Lewis, Terry
Mr. Frank Haynes and


Lloyd, Tony (Stretford)
Mr. Frank Cook.

Question accordingly agreed to.

Bill read the Third time, and passed.

STATUTORY INSTRUMENTS, &c.

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &amp;c.).

URBAN DEVELOPMENT

That the Liverpool and Wirral Urban Development Area Order 1988, a copy of which was laid before this House on 12th July 1988, be approved.—[Mr. Dorrell.]

SHERIFF COURT (SCOTLAND)

That the draft Small Claims (Scotland) Order 1988, which was laid before this House on 12th July 1988, be approved.
That the draft Sheriff Courts (Scotland) Act 1971 (Privative Jurisdiction and Summary Cause) Order 1988, which was laid before this House on 12th July 1988, be approved.—[Mr. Dorrell.]

Question agreed to.

Maternity Services (Derbyshire)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dorrell.]

Mr. Patrick McLoughlin: In a previous Adjournment debate, I had the opportunity to talk about the future of two schools about which my hon. Friend the Minister and I felt strongly—Ecclesbourne school and the John Port school in my hon. Friend's constituency. We were successful in saving the sixth forms of those schools, and I hope that I am as successful tonight.
There has been much discussion of the maternity services of Ashbourne and Belper as provided by the Chevin unit at Babington hospital. I know that my hon. and learned Friend the Member for Burton (Mr. Lawrence) has told my hon. Friend the Minister of his wish to contribute to the debate, and I can say that I am speaking this morning with the full support of my hon. Friend the Member for Staffordshire, Moorlands (Mr. Knox), who shares the concern that is felt about the future of the Ashbourne maternity unit.
It would be wrong to assume that the unit serves only Ashbourne. Instead, it serves a wide area around Ashbourne, part of which extends across the border into Staffordshire. The unit is a highly valued part of the community, as is borne out by the massive public response against the health authority's proposals. The protests that I have received have been concerned mainly with geographical and practical considerations, for the unit is about 15 miles from Derby. That may not sound a great distance, but in the winter it would be difficult for many to travel to Derby. The health authority has referred to average journey times in some of the documentation which it has issued. It has accepted the times of 82 minutes from Mayfield and 74 minutes from Ashbourne to the city hospital at Derby.
I am concerned about the way in which the health authority's proposals have been introduced. It is intended temporarily to close the unit, or units, on 18 December. That is outrageous and disgraceful. It pre-empts any decision that my right hon. and learned Friend the Secretary of State for Health may make. I cannot see my right hon. and learned Friend overturning the authority's decisions following its decision to redeploy staff. The authority should wait until my right hon. and learned Friend has announced his decision on its proposals.
There is no doubt that the authority faces a financial problem, and part of it is set out in the consultation document. Part of the document states:
There are a number of possible risks facing the Authority which would make the position described above worse. First, it is possible that we shall have to provide funds to meet the cost of some pay awards.
We know now that that is not the position.
Second, it is already apparent that the increase in Local Authority rates for 1988/89 is greater than 4·5 per cent., which is the figure that the Authority has available to fund it, and this will increase the financial problems of the Authority by £234,000.
As my hon. Friend the Minister is well aware, my constituents and I live in the highest rated shire county in Britain. There is no doubt that that rating has added to some of the problems that have confronted the health authority.
I am speaking of a unit that is entirely separate from other hospitals. There is another hospital in Ashbourne—St. Oswald's—to which it was planned to move the unit early in the 1990s. I welcome that plan. It is right that the unit should be moved there. The move would make St. Oswald's more of a community hospital. At present, it cares mainly for the elderly and undertakes the tasks of a small minor casualty unit. If it were possible to take the maternity unit and put it on the site of St. Oswald's, I believe that would greatly help the area and greatly improve the local facilities. The health authority could then sell the land on which the Ashbourne maternity unit is situated, and thus raise a considerable capital asset.
I notice that in its consultation documents it talks about this unit along with a plan for the closure of other maternity units, and it says that it expects the sale of the units to raise some £200,000. I believe that it is erring on the gravest possible side of caution, as the Ashbourne site alone is likely to fetch more than £200,000. Therefore, the health authority will have capital available to improve some of the facilities at St. Oswald's, which I believe is vital.
A short while ago, I visited Derby city hospital and I would like to place on the record a few facts about that hospital. It has come in for some criticism from various sources, but I can only say that I was tremendously impressed with what the City hospital has to offer. Nobody can argue that it does other than hold all the facilities that a high-tech birth requires. I saw babies in the hospital who had been born at 24 weeks, and the care that can be given to those babies at that hospital is unbelievable. No one is saying, or has ever said, that that sort of facility can be offered at St. Oswald's. What the people in Ashbourne are saying is that, a week before Christmas, before the worst of the winter and before the Secretary of State's approval is the wrong time to close the unit.
Not so long ago my hon. Friend the Under-Secretary was kind enough to come to my constituency and participate in "Any Questions". My hon. Friend knows the sincere feelings of parents in that area. She has said that quite often we manage to get along with the procedure without going to Ministers, and that we usually carry people along when we talk about changes. If the health authority proposed a proposal to move the maternity unit up to St. Oswald's, my hon. Friend would have local agreement, my full support, and the health authority—as it obviously is not my hon. Friend's decision—would have my full support. That is what we are anxious to see happen.
A number of aspects worry us, such as the likelihood of an increase in home confinements, which is confirmed by the health authority's documents. One matter that especially worries me is that it does not say in its documents that it is closing the maternity unit and taking it to Derby to improve the maternity service, but the reason given is that the closure should take place on financial grounds. I find that difficult to accept, because, although the health authority has listed the savings that it believes will be made, it does not make any allowances for any increase in the ambulance service, and at present it is saying that all that would be needed is 1·32 full-time community midwives. At the end of the day, I do not believe that that will prove sufficient.
I should like Trent regional health authority to ask the district health authority to conduct a special review of


health care in the Ashbourne area in relation to the position of St. Oswald's in the community. St. Oswald's is a community hospital; let us see it used and become more a part of the community than it is at present. Let us see the leagues of friends from the maternity unit and St. Oswald's making a positive contribution to a community hospital in the Ashbourne area. I think that that would get a lot of support.
I plead with the Minister, and through her with the Southern Derbyshire district health authority, not to make the closures until adequate provision has been made or until the need for provision has been assessed and the Secretary of State is sure that the closures should go ahead.
The consultation paper about Ashbourne, which was published by the health authority, discusses selling off the unit, but it also says that, presently,
It is not intended to dispose of the site".
I am particularly concerned by such words.
In southern Derbyshire, we have a great deal of new hospital accommodation, but we also have a lot of old accommodation. That accommodation is a liability on the health authority and it is leading to many of the authority's present financial problems.
Babington hospital is based in Belper. It is a valued local facility and the Chevin maternity unit serves a number of surrounding districts, including Crich. The average journey time from Crich to the new city hospital will be 100 minutes.

The Parliamentary Under-Secretary of State for Health (Mrs. Edwina Currie): That is not so.

Mr. McLoughlin: My hon. Friend disagrees, but that figure was derived from the Southern Derbyshire health authority's public transport access arrangements; it is not my figure. The return fare will be £4·68. The journey time would riot be as important if the journey was made once, but what about the husband who wants to visit his wife a number of times so that she does not feel isolated in the city hospital?
With the Ashbourne facility, the health authority knows that it has a unit to close, which it can sell to make a capital gain. That is not the case with the Chevin maternity unit, which is part of the Babington hospital, which mainly cares for the elderly. I want such hospitals to be part of the community rather than serving an isolated sector of it the—elderly. They should offer a range of patient care. That is why I wanted to bring this matter to my hon. Friend's attention.
Although the health authority may have the power within the rules to press ahead with the closures on 18 December, I do not think that that is right. I believe that that cuts short the political process that allows representations to be made at the highest level, and I believe that that is wrong.
I urge the health authority to reverse its action and not to go ahead with the closures until it has had the agreement of the Secretary of State. The health authority should go one step further and reach a consensus so that the Secretary of State does not have to make a decision. We should make a local decision about the hospitals rather than ask the Secretary to the State to make it.

Mr. Ivan Lawrence: rose—

Mr. Deputy Speaker (Mr. Harold Walker): Does the hon. and learned Gentleman have the consent of both the Minister and the hon. Member for Derbyshire, West (Mr. McLoughlin)?

Mr. Lawrence: Yes. I am grateful for the opportunity to intervene in the debate.
Although Ashbourne maternity home is not in my constituency, I have to tell my hon. Friend the Minister that there is very strong feeling against the closure in east Staffordshire, for that home, with such an excellent reputation, serves many of my constituents. They have written to me from Ramsho rn, Mayfield, Uttoxeter, Leigh, Bramshall, Ellastone, M.archington, Denstone and Rocester. The South-East Staffordshire community health council has received over 100 letters from members of the general public in my constituency, all opposing the closure. It has received representations, as I have, from the women's institutes, local doctors and local midwives.
Of course the removal of a local facility always produces an adverse response, but the proposal is particularly galling and unnecessary. When Leek and Wirksworth maternity homes were closed in recent years, the argument for their closure was that Ashbourne maternity home would provide the services that had been closed down in those villages. When the snows pile up and the roads of south Derbyshire become treacherous in the winter, as they do almost year upon year, mothers and visitors will have to make a road trip of 35 to 40 miles because there are no maternity facilities in Uttoxeter.
Undoubtedly, new facilities at Derby city hospital will be of the highest standard, but what consolation will that be for mothers who have a rapid labour and have the risk and misery of worrying about the delivery while they make the long journey to Derby on winter roads? What about those of my constituents who have no access to private transport, when public transport is not always available just when a baby is about to be born or the mother is in distress?
My hon. Friend the Member for Derbyshire, West (Mr. McLoughlin) has made an excellent case. He is a great example of a caring Member of Parliament working at his best. He has my full support. He also deserves the support of my hon. Friend the Minister who is, as she well knows, my own Member of Parliament. I hope that she will be able to respond positively to our demands. Of course I appreciate that it may not be feasible to keep open Ashbourne maternity home in all the circumstances—my hon. Friend, and the district and regional health authorities, have analysed that. But if that is so, there is a sensible and practical alternative in transferring the facility to St. Oswald's hospital, which is nearby and is excellent.
I support the request of my hon. Friend the Member for Derbyshire, West for a full review of the hospital and the health facilities in his area. The Government have done wonders for the National Health Service. They are building up facilities all over the country which were run down under the previous Labour Government. They are spending more money than ever before. They are paying the nurses more than ever before. They are providing care and help undreamed of in years gone by.
Why is it necessary to spoil such an achievement and the appreciation for that achievement that is demonstrated


in election after election by my constituents, by over-centralisation, when the retention of village hospitals is perfectly feasible in some circumstances such as this and when that becomes socially desirable? It is a particularly cruel stroke if this maternity home is to be closed before that review takes place and before Christmas 1988. I ask my hon. Friend the Minister to think again.

The Parliamentary Under-Secretary of State for Health (Mrs. Edwina Currie): I congratulate my hon. Friend the Member for Derbyshire, West (Mr. McLoughlin) on winning the ballot, and I noted with pleasure the intervention from my hon. and learned Friend the Member for Burton (Mr. Lawrence). They are my close neighbours in the midlands and no one could have better hon. Friends or neighbours. I am grateful for the help and support that they give me in my work here and the way in which we work together in the midlands.
I note that my hon. Friend the Member for Derbyshire, West takes a keen and active interest in the health and welfare of his constituents. He tells me that he took part in a delegation in July to discuss health matters affecting his constituency with the then Minister for Health. He has written 25 letters and tabled 20 questions on health-related matters since the general election, and he has certainly kept me busy.
I know the Southern Derbyshire district health authority very well, as it covers my constituency. It also serves the residents in the constituencies of Erewash, Derby, North and South and Amber Valley. It looks after the best part of 500,000 people and is one of the largest health authorities in the country. It is covered by the Trent regional health authority, which is also an enormous region. Its spending rose from £369 million 10 years ago to more than £1,000 million last year, an increase of about 14 per cent. in real terms. This year, Trent's initial cash allocation was increased by a further 6·3 per cent. to over £1,050 million, well above the national average increase of 5·7 per cent. As a result, Trent's poor funding in the past has now been corrected and it has moved from 92 per cent. of its target 10 years ago to 97 per cent. under the RAWP allocation.
We should not under-estimate the impact of the Trent regional health authority or of the National Health Service generally on local life. More than 660,000 in-patients were cared for in Trent hospitals last year and total employment in the regional health authority stands at about 75,000 whole-time equivalent staff. The amount of money contributed to the local economy by the health authority is considerable.
The South Derbyshire health authority has had a momentous year and we should not under-estimate how much it has achieved. It has opened three major new developments at Ilkeston community hospital, Derby city phase I—which includes a maternity unit—and the Derbyshire royal infirmary stage II which was opened in May. During 1988, 644 old beds have closed in the area and have been replaced by 585 new ones.
That has led to much improved occupancy rates, which were hovering around the 50 to 60 per cent. mark in some of the major specialties. It has also led to spectacular improvements in the waiting times and lists, improvements

which we hope will continue. The authority is in the middle of a painful and obviously very contentious process of rationalising hospital services. Since 1986, 10 hospitals have been replaced or closed. The health authority voted to close another six in September, including the four under discussion today.
My hon. Friends will be aware that most of the decisions were settled locally and did not come to Ministers. The closures are only partly due to finance. In a number of cases, the decisions were taken because the area was well endowed with small old Victorian hospitals whose economic lives would soon come to an end.
The district had an initial allocation this year of £100·7 million. That represents almost a 6 per cent. increase in cash limit over the previous year. When I became a Member of the House, the authority was spending £78 million. When my hon. Friend the Member for Derbyshire, West became a Member in 1985–86, it was spending £86 million. As I have said, this year the initial allocation is £100 million and the authority has access to other funds. That clearly shows that South Derbyshire health authority has received a great deal more money this year than last year and is much better endowed than before. Therefore, I do not think that the health authority has a strong case for arguing that it should have a lot more money. It has been allocated a much higher share from Trent's increased resources.
At the end of 1987–88, the district had an overspend of £2·2 million and at the beginning of this year it faced a deficit of £2·7 million. Most of that was due to overspending at the Derbyshire royal infirmary. Having opened new facilities at the DRI, the authority found that people liked them and activity levels jumped by about 8 per cent. in one year. That was part of a 23 per cent. increase in activity levels over the past five years.
The authority has considered its health indicators, the most recent of which relate to 1986–87. They show that the total proportion of acute patients dealt with as day cases in the Southern Derbyshire health authority was barely 9 per cent. and was as low as 2 per cent. in some specialties. However, in the health authority that covers most of the constituency of my hon. and learned Friend the Member for Burton—the South-East Staffordshire health authority—the overall figure for day cases was 22 per cent. and in some specialties it was heading for 50 per cent. As a result, the average cost per patient in the South-East Staffordshire health authority area was £514. In Southern Derbyshire, it was £738. Given the patient mix, that was 12 per cent. higher than expected. The health authority is well aware of these figures. They do not mean that, automatically, Southern Derbyshire is inefficient, but they raise questions that need to be examined, and I understand that the health authority is doing that.
The health authority has much success under its belt and should be proud of that. After a slow start under general management, the pace quickened in the last year or so, and major changes are now under way. While I and my constituents probably have fewer hospitals to visit, the standards in those hospitals are immeasurably higher, and modern facilities of the highest standard are now at last available to Derbyshire people after years of losing out somewhat to the south of England and, more recently perhaps, to Nottingham and Sheffield.
The district health authority is looking after more people better and faster and getting them home more quickly. With the arrival in Southern Derbyshire of


Trent's trend-setting personal services philosophy, which I saw for myself in Nottingham recently, I am sure that the health authority's public image will improve. Certainly, its presentation of some of its policies could improve: I am sure that we all agree on that.
My hon. Friend the Member for Derbyshire, West asked for a review of the services around Ashbourne. I know that the regional health authority has taken heed of his concerns. It tells me that it spent some time discussing with the Southern Derbyshire health authority the health needs of Ashbourne and its surrounding villages. It has agreed to look specifically at Ashbourne and the surrounding communities with representatives of the local community and to look at the broad shape of in-patient and out-patient services, as well as the wider network of community services. In so doing, the health authority will look specifically at the longer-term role of St. Oswald's hospital, and that will give it the opportunity to discuss the ideas that my hon. Friend has so eloquently put forward.
As I am sure my hon. Friends will realise, the closure of peripheral maternity units puts me in some legal difficulty. If the community health council persists in its opposition to closure, these matters will come for decision to my right hon. and learned Friend the Secretary of State. I take on board what was said about temporary closure. That is quite commonly done, and quite legal, although I realise that it can infuriate local people. It does not influence the judgment of my right hon. and learned Friend on these matters, and he will base his decisions entirely on what is needed for patients, mothers and babies in that area.
In the short time that is left, I should like to place on record one or two facts. The 1987 figures for perinatal mortality in our area are not as satisfactory as any of us would hope. Perinatal mortality, which is mortality within one week of birth, in England and Wales in 1987 was 8·9. In Trent, it was 9·3 and in Southern Derbyshire it was 9·6. Our new figures to be published nationally tomorrow will show that mortality among our babies has fallen again to a new all-time low. We all hope that that will happen in the Southern Derbyshire health authority area as well.
My hon. and learned Friend the Member for Burton spoke about the problems of travelling. I can tell him that people in labour are already travelling. I am advised that, of mothers admitted to local maternity units for births but later transferred to a district maternity hospital in 1987, Ashbourne had 20, Ilkeston had 13, Heanor had eight and Belper had 68. In the period April to December 1987, 27 of those women from the Babbington unit at Belper were transferred during labour. I do not know whether my hon. and learned Friend has ever tried travelling in an ambulance during labour. I can tell him that it is the most uncomfortable journey that one can have. When my right hon. and learned Friend takes his decision, it would be wise to take that sort of information into account.

Question put at and agreed to.

Adjourned accordingly at twenty-three minutes past One o'clock.